Snippets from latest @OpenSquareCap Q letter on #oil market (Oct 1).

"We persevere through this tortuous investment because the shortages we forecasted are getting larger.. we’re running about 3 months ahead of the anticipated recovery path we published in our Q1 report" #oott

"We anticipate that if prices recover significantly, (US) production will lag as producers repair balance sheets and return capital to shareholders before drilling. Given the treadmill effect of high decline rates though, the days of US reaching 13Mbpd of prodctn are likely over"

"It’s difficult to convey how severe this impending #EnergyCrisis will be if we recover. We had anticipated supplies to fall short of growing demand by ~1M bpd prior to the COVID crisis and higher oil prices to ensue....

...Yet, what we’ve done to global production in our overreaction to this pandemic is stunning. We’ve dialed down our supplies to a level where we’ll only stay balanced if air travel doesn’t recover....

To now dial production higher to meet recovering demand will be challenging given the dearth of capital, lack of investors/investments, and the continuing erosion of base production from the 5 years of underinvestment." cc
@contrarian8888 @trader_ferg @WarrenPies @TwainsMustache