Here’s a fun article. I expected this sometime last year, as it shows the largest oil sector firms understand what must be done.
In order to regain stability of the oil market, production needs to be brought in line with consumption. That is not rocket science. What is considerably more difficult is how that process is permitted to play out.
It’s the overpopulated island problem. Two men are stranded on an island with just enough food for one to survive. How many men survive?
No men survive. They both eat just enough food to ensure they both die, fighting each other the whole way. That’s just instincts.
Baker Hughes and Schlumberger are two of the biggest players in the services space. And they’re old and well connected and staffed by pretty smart people. I’m comforted that someone is finally forcing the weakest hands to wrap up their deaths, as in the long term this is going to minimize the damage to the US energy sector.
Hopefully the more stable services firms can come together, pick the US supply that needs to be idled, and shut it down. Waiting for these zombie oil companies to keel over themselves is growing tiresome.If you enjoy the content at iBankCoin, please follow us on Twitter