Originally Posted by
Excargodog
It’s not just demand destruction that attenuates price increases, it’s also that supply has elasticity as well. Older fields that are economically marginal and potential new drilling that are uneconomical to develop at $60 a barrel can be fracked and production expanded at $90 a barrel. The higher the price, the faster the production can be increased.
There are a few articles advertising capital spending restraint due to fear of price collapse when this is over. Possible the Arabs flood the market for liquidity purposes before exercising discipline.
The other poster article saying shipping capacity will be the thorn, seems less likely considering how much extra payload UPS, FedEX, and Atlas created to sell during high demand periods.
He was basically saying the world shipping fleet was already operating at Vmo, so any slow down cannot be “made up”.
California container ship log jam all over again except with oil tankers, not sure he proved his position on fleet capacity or took into fact that Saudi was underutilizing their pipe line to the west coast before this started.