I agree...$80 might be a year or two off, but considering the rapid drop in rig count, and general pain begin experienced by resource based economies I would not be at all surprised to see $70-75 Brent prices in the next few months. The Saudis are waiving the big stick for 3 reasons: First, to put the squeeze on the shale players with high levels of debt. Second, to punish fellow OPEC members who seldom maintain their allocation quotas of production and third, to help revitalize and spur demand for crude. High fuel costs presented opportunity for companies like Tesla to gain a foothold in the market The fact that Russia, Venezuela and Iran get caught in the cross fire is an added bonus....BUT everyone is feeling the pinch! S.A. has even sought loans to cover their mounting deficits...
If we can break out above $64 (notice the resistance level), which I suspect we will see with the new storage numbers next week, we should see a continued up trend in the price of crude which is good for all of the O&G companies that have gotten squeezed.
T2