agip wrote:
there is a new and interesting dynamic in the oil biz. Could change, but for now:
1/ Oil companies have accepted that oil will be less in demand in the decades to come.
2/ Therefore oil companies are not spending the usual billions they spend to find new oil fields. Why spend that money if demand will fall in the future? And better to use those billions to sort out how the oil companies can survive in a new energy world.
3/ So when there is a price spike like this...there are fewer fields that are available to come on line. Often there are fields that have been found but are only viable at, say $70 oil. Normally they stay fallow, but are turned on when oil goes high like now. But because of lower spending by oil companies, there are fewer fallow fileds to turn on.
4/ So the supply does s not come up as it has in the past. So prices may stay higher, longer.
Point is, it could be different this time.
Look at the EIA oil export charts and they tell you a lot. When Trump was president exports skyrocketed. From around 20,000,000 barrels per month to around 100,000,000. Rather than keep that oil in the U.S. to keep prices relatively flat during the summer, U.S. oil companies were allowed to sell out the U.S. oil future. Oil companies make a buck now -- that is the goal.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrexus1&f=m