Everybody in this industry has known this day was coming, it will come and go, and consistent with most things the news will hype it, the bankers will make it more volatile and many will think its this end of the world when its really the very basic thing you theoretically learned about economics in junior high. Oil (unlike say natural gas in the old days when it was flared) has to be transported and processed and consumed .... there is is reason you can't shut a conventional well down easily and expect it to come back at full force when you resume pumping. Different wells have different dynamics but essentially none of them get better once the are flowing and then shut in. Oil storage is very finite and the line fill of the supply chain is equally finite .... if people aren't consuming energy at the rate expected a number of months ago you end up with a tsunami of sorts. Unless someone figures out a way to efficiently store large amounts of electricity, our global use of the petrochemical molecule will eventually return to near normal levels .... and in all likelihood oil will spike in the opposite direction .... the news will hype it, the bankers will make it more volatile, and everyone will think its the end of the world .... lather, rinse, repeat. As I tell my 27 year old, who is fully dedicated to manufacturing directional drilling tools (in what used to be my very nice race shop), this is a business where you work hard when business is there and you fish, hunt, etc. hard when there is nothing to do. That is unless you have a lot of debt .... and then you tend to go bankrupt (bankers again). You guys have seen this in drag racing over and over .... many times you did not know you were seeing it and attributed it to something else. People who take these kinds of risks for a living will continue to work hard and play hard ... yes they may throttle back some, but life will definitely continue on.
The press is making a ton of noise over a very near term delivery stripped from a larger position. Is it wrong? Not technically, is it the ultimate hype .... yeah, sorta.
