Good Morning Peartart , I think $70 will spark up activity in development of new oil , but things are so desperate financially for the great majority of oil producers , the will need new money and lots of it to commence drilling . And as it takes an average of five to ten years to get new projects to the market , oils shortages could push prices to unprecedented levels , the financial barriers are their biggest problem as the oil financiers have lost Trillions in recent times (and this will be felt in all forms of banking eventually) so there will be a great deal of trepidation in the financial World to dive back into financing oil. Hedge funds were hedging US shale at $80 pb and collecting a cool $20 pb for free. But once oil dipped below $80 pb they had to pay up . and at $30 pb they were reneging and capitulating one after the other and now a lot of them have vanished. This has been a disaster for Hedge Funds , and indeed the financial World . So where is the money going to come from ? There is only one way , Much higher oil prices . However there will be a lag before massive amounts of capex is unleashed , but it no doubt will happen . In a previous post I said I thought MRM would take three years to peak , but it could happen much sooner . We are not totally dependant on new oil as we have oil and gas contracts from Saudi Arabia to Singapore and W.A. but every bit of new work is welcomed . New amounts of capex will push up contract and day rates and profits . So it is the long game that matters here . Just on another note , the capitulation of Canadian oil sands is at hand . The average price received for the first quarter was $20.26. pb the average cost $72.50 pb........ Cheers
MRM Price at posting:
45.0¢ Sentiment: Hold Disclosure: Held
