Ann: Buffalo Farmout and Redevelopment, page-216

I think SK is making some good points in my understanding the macros of the oil market. IMO OPEC recognises it's got an awful lot of oil to sell in a world slowly but surely moving away from carbon based energy and products. It has shown it can turn the tap on and off to reflect overall demand and has done it pretty well during COVID. OPEC has done a lot of the heavy lifting during a period of a rough 20%+ decline in demand. The improving POO is also a reflection of this. I think OPEC has shown the potential to turn the taps on to higher volume reasonably quickly to keep the POO below say $60 and try deter new development and keep more marginal shale US from starting up again in earnest. It's power should never be underestimate IMO.

The graph of break even prices earlier in this thread is an eye opener for me particularly Chevron, BP and Shell. BE down from around $120 to $35 since 2013 although the curves are now flat. I recall Saudi and other Middle East oilers in general had a BE of $15 or less but not sure on this.

My long term concern is ultra low cost ME oilers go rogue and turn the taps on with the POO declining to crush competition so they can sell their remaining oil. It's worth nothing it's worth nothing in the ground with low demand. They would still sell their oil at a good profit however the fiscal implications to their economies would be front of mind.

Paradigms mean nothing in this world so anything's possible. All I know is 2050 will be a completely different world but I believe there is a
great opportunity for CVN to be a lower cost producer and make some good money for SHs. How long that is is anyone's guess. And that's what makes markets - differing views - buyers and sellers.