re: There’s more oil and gas than ever — and the industry is tanking

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So at what point do "depressed prices that will rebound" become "realistic prices that are going to continue to lag the broader market?"

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As you’ve pointed out there is no “becoming” to it. They’ve been at that point for some time. The interesting question is “how long will this continue?”.

Consider the five main oil exporters right now: Saudi Arabia, Russia, Iraq, the U.S., and Canada.

Three of those five are in tenuous-at-best political and national security situations going into the future (SA, Russia, and Iraq). If SA and Iran continue to escalate their proxy wars who’s to say how long it would be before they, Turkey, Iraq, and everyone else in the area collapses into serious infighting akin to Syria?

Russia, on the other hand, is in danger of defeat from within. If someone strong doesn’t step up to replace Putin upon his death we could very easily see further political splintering and disruption of their oil production.

Canada’s tar sands are infamously expensive to extract and have only been possible thus far due to major government subsidies. How much longer will that continue with an aging/shrinking tax base?

Which leaves the U.S. We’ve absolutely crushed costs of production in the last 10-15 years, our political situation (both internally and regionally) is rather stable, and our capacity to produce and export is at an all-time high.

Who do you think is in the best position to benefit from supply disruptions going forward? How likely do you consider it that we see a serious disruption in production by the other major players? How soon?

It might not be this year. Or next. But I’m bullish on American O&G coming back stronger than ever in the coming years.