Chevron posted extremely disappointing earnings today which included disclosure of a 1% slump in production. Exxon Mobile posted an earnings beat, but they also reported production cuts of a little over 1.5%. Both reported lower project spending going forward.
The market is trying to react to the oil price slump…mostly. There are assholes, sure, like Total, which brought another 10% of production online to try and cover their awful quarter. Or Occidental Petroleum (fuckers). But where there are not immediate production cuts, there are major project terminations coming along every day. People are abandoning plays left and right, trying to find their own sweet spots.
What needs to happen, in order for us to get prices back above $60 a barrel, is sort of two fold. The first thing we need to see is production to meet demand, which could happen in short order if the individual players can get their fucking acts together. OPEC coming in to save themselves from this little mess they started would be nice.
But I have this lurking suspicion that that might not be enough. We also have the threat of production coming back online strong at every possible uptick in the price of crude. And to put an end to that, we really need to see some of the most horrible names in the business fold like tacos at a fiesta.
Of course the best names to fold are ones you and I have never heard about. Private plays with private financing owned by private cocksuckers whose pending bankruptcy filings I couldn’t care less about.
In the past quarter, the difference between production and consumption has already narrowed to ~2% if the EIA is up to date. It was ~4% back in the beginning of the year. It must be remembered, demand for oil is not decreasing. We simply have a sputtering period of too much of it, as projects come online faster than needed.
I pray that as the overproduction narrows the market will simply reward us with higher price per barrel. But I do have this horrible lurking sensation that what the market really wants to see is blood.If you enjoy the content at iBankCoin, please follow us on Twitter