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Re: Krombacher post# 338057

Friday, 04/24/2020 4:31:01 AM

Friday, April 24, 2020 4:31:01 AM

Post# of 361298
Regarding:

otal also knows full well that once the highly levered middle tiered companies struggle and potentially perish, the door will be open to hike oil prices back up without that competition keeping prices low...because that competition will be out of business.




There is more to it:

https://oilprice.com/Energy/Crude-Oil/Shales-Decline-Will-Make-Way-For-The-Next-Big-Thing-in-Oil.html

Read "Deepwater" chapter:

Your takeaway

As has been previously discussed, project redesigns and vendor price concessions have lowered most deepwater GoM project breakevens in the low $30s and even below that in some cases. This is significantly cheaper than most shale development. Chevron with a number of projects under FID review is targeting development costs of $16-20.00/bbl in the GoM. This will lead to a new investment cycle in deepwater stock plays in relatively near term.

As the currently burgeoning supplies of oil begin to fade in the latter part of this year, and this accelerates into the next, it will become painfully evident that the world still runs on oil. Due to lack of development of the deepwater resource in the prior decade, we are likely to see spot shortages, as the world economy recovers from the current downturn.

The price will rise as demands for it increase. We see oil comfortably back in the $40’s by years end, and increasing toward $60 in 2021.



That is very good news (a realistic prediction, that is) for exploration in the EEZ and JDZ.