TWIMO very linear thinking, as if somehow a green reboot from Europe and US is somehow bearish for oil, like we can flick a switch and be powering the world with wind and solar. These sectors have gotten crushed for 6 years, managements have not re-invested a dollar, they are in balance sheet repair mode; they also know politicians gunning for them in 2020's, which further. means no risky spending projects or R&D.....meanwhile demand for oil, especially products continues to climb every year (strip out covid year). Also, majority of the spare capacity, which was US shale, is in decline, only a number of tier 1 assets have not reached their peak of yet, those wells with declining production are not coming back on, not with oil at 50 nor 75. Old adage is true, high prices cure high prices ad low prices cure low prices in commodities...and on to that woke political culture who will attempt to over-regulate and generally disdain for the industry, and the perfect storm is coming to the forefront for supply shortages and an energy crunch sooner than later. The bottom is in for the entire sector, the time to be bearish was in 2013/14, not right after spot went negative for the first time ever. This is all without mention of any inflation, which if that ends up coming will make this who space a powder keg, and 2008 highs will come out fast. Very short term yes prompt delivery months probably will not take out much higher than 50-55 bc it is a true physical market, but the curve is already pricing in tightness for 2H '21 and beyond
LKOne of the increasingly few voices forecasting deflation in the midst of the current recovery-tinged optimism and inflation bias of the market. Bears close watching in the new year to see how things actually play out.
OAAnother bearish oil report? come on!