My investment thesis is that Oil will hit bottom after 3Q earnings are in. It promises to be very difficult and cruel reporting period. At that time the valuation of assets will be revised as well and some companies will not make it.
One hope may be that strong demand continues as supply falls off and the balance is restored much faster than in past crashes. Investors would do themselves a favor to be late to this event. I think the bottom will be a very clear and unmistakeable event on heavy volume. Even if you miss the actual bottom, 4Q results could be just as bad or worse.
Besides the history of Oil crashes supporting this thesis, it is crazy to allow huge amounts of capital to continue to be wasted with little chance of adequate return. We have already had reports of massive energy debts approaching $500 billion here in North America that may be troubled.
In a year or two things will look much better. The worst time is perhaps this slow motion train wreck that is taking place. For investors it is a good time to figure out which companies have the best reserves and are best positioned to survive intact.
For those working in Oil I have been there. Lots of things could happen such as in the Middle East to change the Oil dynamics. But if that doesnt happen, it isn the end of the world.