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v10climbz OP t1_iuftrkd wrote

Reply to comment by LionRoars87 in Diamondback Energy for the Win. (FANG) by v10climbz

Yeah it’s been pretty stable. It’s much more influenced by supply rather then demand.

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LionRoars87 t1_iufugkz wrote

Agreed, and the supply side is the reason oil prices will stay high for awhile. Most investors seem to be ignoring that there is an energy shortage. And none of the main suppliers are motivated to increase production. Years of under investment in oil and gas has led to low levels of spare capacity. And any further supply disruptions could spike oil much higher yet again.

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v10climbz OP t1_iufvpa9 wrote

Reading this comment is beautiful. Very rarely do come across someone on Reddit that understands commodity pricing or the energy industry. Hats off to you good sir. Yeah the big boys aren’t doing a lot of new drilling but rather they’re taking profits from existing wells. Which is fine by me. They’ll keep crushing revenue and cash flow streams if oil stays at the price. I mean there’s some new drilling going on but companies are paying of debts and waiting to see what happens in the coming elections. There’s plenty of oil left in the ground. Just look at the Baker-Hughes inland rig count to get a scope of things. It’s nothing like pre-covid times but there’s some new exploration. Private equity and investors are just much more hesitant with handing out cash for new drilling operations. But, I think oils at a price and will stay at a price that makes sense for upstream/midstream suppliers. Rig count should stay steady

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Crafty_Ranger_2917 t1_iug0iik wrote

I should have said price not demand. At any rate Texas sweets have been from $70 to $120 in the last six months. What am I missing here, that seems fairly volatile? Based on last couple years it looks like the current $80-ish isn't cheap either....under the theory that demand might shrink.

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v10climbz OP t1_iug4r33 wrote

You’re not wrong but if companies are locking in profits at 60 dollars a barrel and the lowest WTI has gone in the last sixth months is 78 with a high of 122ish. Supply is the key factor in oil price I.e Brent Crude or WTI. There’s a bunch of oils but these are the two benchmarks. With inflation and OPEC+ supply cuts oil prices should stay at a level where massive profits can be made. OPEC tried to destroy the American shale producers years ago. The flooded the market and many American oil companies went bankrupt. But, recently OPEC has decided if you cannot beat them join them. The oil cartels including OPEC, XOM and BP don’t wanna exacerbate their reserves they wanna influence demand to a point where everyone in the energy sector is happy. That’s my hypothesis.

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