Some dangerous waters happening what with a 12% drop in the rig count just this week.
How will the remaining rigs fare given the dramatic lowering of petroleum necessary to maintain former product levels? And I wonder what right we have to expect a return to anything formerly the norm when I know too much has changed for that to be even remotely realistic. How can we expect to return to earlier industrial needs and homeowner needs when we have no idea as to our being able to return to & sustain life as we knew it? A large part of difficulty associated with predicting future needs results from our never having gone through demand destruction such as we are now experiencing. While our government has been truly dazzling in its responsiveness to ongoing issues, the fact remains that these concerns truly ARE ongoing. There's nothing temporary when it comes to protecting our lives and day-to-day health worries.
As a senior I will not be venturing out any time soon to avail myself of my favorite haunts, be they restaurants, entertainment fares or church-related sites. Heck, I don't even dare to visit Sam's Club or a regular supermarket! While I have no underlying frailties exposing me to immune system-based threats, I am a senior and that, of itself, confirms that my "repair rate" will not equal that of a younger person.
Our nation is full of people like me---old yet more than capable of self foraging. However, we are also smart enough to avoid venturing outside quite possibly inviting premature death by exposure to fellow humans now capable of carrying my death warrant. I'm suddenly allergic to my fellow human beings---friends, family, coworkers and even lovable strangers I'd normally welcome into my life.
The rig count drops might appear to be pointing to situations on the brink of or ending as soon as the economy reopens. But that is so far from the truth for it fails to recognize "lead time." This is the time needed to reorganize things forcibly dropped out of the picture a couple of months ago when the pandemic challenged much of our previous existence.
Shut-in wells will not be reopened just like that. It's not like flipping a switch. It's more like pulling together a whole team of petroleum engineers and computer specialists who monitor the gauges measuring extraction. And there's the maintenance folks and laborers and office personnel and even support people manning helicopters and bringing in feed and so much more. A lot of investors would do very well to visit the Midland-Odessa area (Permian Basin) and spend a few days learning about life in a desert formerly not good for much more than oil and gas and countless acres of barely profitable windmills that pay a landholder $50/month for usage fees per acre---and even then you've got to commit a couple of hundred acres before site construction will even begin.
This isn't a rosy picture for sure. But there are many, many Americans about to enter into what I call "the hungries." I've never seen starvation and I'm not of the belief I could even allow it to happen in front of me. So I'm wondering how far I will go to alleviate some of the pain of others?
More as things develop.
AI
