First, excellent article. Thank you. But why did you take out the -2.7 Mb/d GFC shortfall in the final calculation? Recall, Q1 saw a 1 Mb/d shortfall vs a 0.4Mb/d build=> -1.5 Mb/d. EA says another -2 Mb/d of ruskie oil coming off. Seasonal demand ups another 2 Mb/d. Ergo, -1.5+-2+-2 = -5Mb/d. Conservatively round down to say 3-4 Mb/d. If oil demand destructs by 2.7 Mb/d (as in GFC in 2008) => 0.3 to 1.3 Mb/d short. Round it up to 0.5-1.5 Mb/d. If OPEC+ did put 0.5-1.5 Mb/d, with a 1/3 of the rigs=> A balanced market with the above assumptions!? I don't think OPEC would do this as it's not in their interests but you took out this -2.7 Mb/d oil GFC shortfall assumption thereafter. Or maybe I misread it.
If you focus your analysis on natural gas and extrapolate a $20-$30/mmBtu price (4-6x current levels, 10xish historical), you'll come to the conclusion that a new global depression is almost guaranteed. It's near impossible to turn a profit in any industry (except upstream/downstream) with those prices, esp. regarding electricity.
First, excellent article. Thank you. But why did you take out the -2.7 Mb/d GFC shortfall in the final calculation? Recall, Q1 saw a 1 Mb/d shortfall vs a 0.4Mb/d build=> -1.5 Mb/d. EA says another -2 Mb/d of ruskie oil coming off. Seasonal demand ups another 2 Mb/d. Ergo, -1.5+-2+-2 = -5Mb/d. Conservatively round down to say 3-4 Mb/d. If oil demand destructs by 2.7 Mb/d (as in GFC in 2008) => 0.3 to 1.3 Mb/d short. Round it up to 0.5-1.5 Mb/d. If OPEC+ did put 0.5-1.5 Mb/d, with a 1/3 of the rigs=> A balanced market with the above assumptions!? I don't think OPEC would do this as it's not in their interests but you took out this -2.7 Mb/d oil GFC shortfall assumption thereafter. Or maybe I misread it.
Excellent and right
If you focus your analysis on natural gas and extrapolate a $20-$30/mmBtu price (4-6x current levels, 10xish historical), you'll come to the conclusion that a new global depression is almost guaranteed. It's near impossible to turn a profit in any industry (except upstream/downstream) with those prices, esp. regarding electricity.