/biz/ - Business & Finance

>>19143444
(2/2)

So again, not considering the stripper wells, after a lot of these wells close down it requires a lot of capital to start them back up. Even if U.S. Shale wanted to kick production into overdrive it costs way too much time and money. The profit margins are going to be super tight with all the excess crude. Have we forgotten that almost all of these shale companies are saddled with huge amounts of debt? It's a huge risk to take on with the uncertainty in the oil market. Unless they go full retard, I don't see them spiking production again and creating another contango. I do see the companies with strong balance sheets starting back up again, but it won't be enough to create another insane contango.

Option 1: The only way I see your situation playing out is if we have another lockdown, but Trump is already pissed off at the libs for not letting him reopen the economy. I'm not sure he's going to let us shut down again after the economic devastation from the first one.

Option 2: This will most likely not happen either. We must factor in that the sole reason this contango occurred was Saudi Arabian and Russian overproduction and beerflu demand cuts. Even if U.S. kicks it back into overdrive, we probably won't hit tank tops since fuel will be consumed at a higher rate then it was in March and Saudi-Russia has chilled the fuck out.

Probably left out a lot of details but I can elaborate more, just tired. Also, this isn't a bear tanker thesis, I'm just 99% sure that oil is about to get raped on Monday.