Mongy. Your last sentence worries me . We "all "got it wrong in...

Mongy. Your last sentence worries me .
We "all "got it wrong in not seeing the fall from $120 to $100,......... to $26.
The architect of the ORE contract was one who didnt entertain the possibility of $26 oil and typifies the thinking of "90"% of POO followers.
But we all should have seen the prospect of $26 oil.Most of us though will tend to make an assumption that the status quo will likely be maintained in a given situation-its the comfortable(or lazy) option.
Maybe those who were under 20 when the Brent price went down to $10 can be excused for not contemplating $26 oil but the rest of us have no excuse.I cant remember when Brent hit $10 -it was a long time ago.Adjust $10 for inflation and you could easily get a 2015/16 equivalent of ,say,$18,or $28. So we have probably been lower than $26 before.
The oil press is full of predictions of the POO but numerous articles (e.g. on Oil Price.com)
have ,in the last day or so, had a common theme-that the POO is in a sweet spot around $50 right now and probably until the end of 2016.Without trying to attempt to include all the oil players(that would take much too long) a brief selection is as follows:
The producers who can pump a lot more oil (Saudis and Iran) are happy. Average cash costs for the Saudis is $9.90 and Iran $12.60).
Recent prices have crushed the US shalers,who had become the swing producers and taken over that mantle from the Saudis.One to the Saudis,but their financials are becoming grim.
Shalers are lined up (including the receivers of broke shalers) to hit the market with heaps of oil from reopened wells all the way from $50 to $60.$60 could undo the Saudis play that thumped the price down in the first place.
US industry and consumers are happy at $50 but much less so at $60.
Weak Producers are really hurting e.g. Venezuela . and not much can be done to help them $50 is heaps better than $26 though
Major manufacturing countries in the US,Europe,Asia are happy.
Consumers in Europe,Britain, US (already mentioned ) ,Asia etc are happy-they are still getting cheap oil.
Russia,who participated in the Saudi-driven attack on the POO, is getting battered around much in line with the Saudis, will be happy enough with $50 (their average cash cost is $17.
and so on
Read every article that comes up by Googling "oil price" and you will see what Im saying about the sweet spot.
What worries me is that there are heaps of oil price followers who have got comfortable at $50-and ,IMO, they absolutely should not be comfortable.
As the price hit the mid 40s there was a a lot of press about the advisability of opening futures contracts around those levels.If HZN were to refrain from doing so that ,IMO, that would be a very,very bad decision.
Just as HZN had a % of its production hedged a year ago,so should it have a % hedged at this price tier now.A dollar each way,you could say.Why hang out for $60 when you can make a decent buck at $50?.