dividend expecations, page-13

if wti hits and stays at $140 we would be worth a hell of a lot more, but I personally see that as highly unlikely (the staying part of it)

my view is a 70-90/wti strikes the right balance between what the consuming countries can live with and what the producing countries are ok with, at least for the next 5-10yrs which is my investment horizon - anything either side of that feels like it incentivises behaviour to counter that.

sub 70 - you see opec+ cutting output, we’re also starting to see the US drillers pull back around that level, not to mention cost inflation / less economic wells start to push up the break even to around that level (which is similar to ce1 incl capex/time value of money). Pretty widely known that above this level is what a lot of the opec countries need to balance their budgets long term

>90 I think will make inflation more sticky that it is currently and you’ll see higher rates from reserve banks for longer / greater odds of recession or at the very least more recession chatter which is always bearish oil regardless of fundamentals of physical oil market. Add to that the curve ball from any spr/reserve releases from consuming countries or the talk of it and I think you’ll see use reverti below this mark for any sustained period. if we are >100
for an elevated time it will incentivise the shift to renewables at a quicker pace than already happening, talk of which will also be bearish for oil toward this range.

that being said - we will always get the black swan events that swing the price pendulum either way - Covid mark 2 back to 0 or another russia/Ukraine (China/Taiwan?) back up toward 150. I agree where we stand today there are more upside risks than down given the geopolitical environ - take your pick of any number of hotspots that could flare up and cut supply capacity but 1-3%. I just don’t think 140/150 will be sustained for any prolonged period which is what is important when figuring out what sustainable cash flow is for ce1 for me anyway