Good points but a few comments:
1- It may feel like oil has been in a frenzy forever but by oil investment standards, it has been an exceedingly short time to judge spending inertia by... The invisible hand of the oil market always works faster for demand than supply.
#OOTT
1- It may feel like oil has been in a frenzy forever but by oil investment standards, it has been an exceedingly short time to judge spending inertia by... The invisible hand of the oil market always works faster for demand than supply.
#OOTT
https://twitter.com/JavierBlas/status/1587712456134115328
2- Most major oil companies rarely make strategic shifts mid-year unless their hands are forced, usually by a price collapse. Oil companies are creatures of the annual planning cycle. The test is coming soon with a different price environment and a new energy security mandate.
3- Short-term price volatility and long-term demand uncertainty are arguably more potent deterrents of investment than shareholders or green philanthropists when cash-rich (as they now are).
4- The 2021 capex # can be misleading given 2020 effects/demand. Global E&P capex will actually be up a lot in 22 vs. 21, although difficult to disentangle the recovery from price effect. Industry spending is increasing and fast, question is whether it's fast enough.
5- The US situation is unique. US onshore production is hamstrung by an operational inability to increase production faster. It's not an uncomfortable position for the industry, far from it, but it's not a situation that can change in the very short term.
6- The amount of money being generated by the industry is gargantuan, and the longer it goes on (could be years), the stronger the urge to monetize existing resources will get. The fear of stranded assets is real and can be a powerful motivation when capital is available. #OOTT
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