Dumbest article I can imagine. Why would oil go to $20 to end the year at $55. With a cost of storage of $10 for 10 months - why would anyone sell at $20 when they think it will be $55 at the end of the year? Makes no sense - unless the author thinks he is much smarter than everyone else.
Agreed - all the wells of the bankrupt operators are still pumping and some are still drilling. All bankruptcy does it make bond holders the new owners and eliminate interest expense. Resulting companies can be stronger. In my opinion - keeping companies saddled with debt will be the best way to keep drilling less. In any case, there are very few shaky companies drilling at the moment.
Again - not sure you have the capacity correct - you may want to check with a different sourcenthe 9MB number.
You may be wrong here . The curve is going into a very steep contango. The long end for delivery one year out was barely down on Friday. This could be sign of a bottom. There will be an incentive to buy the commodity and store it. So you will see storage levels rise at the bottom. Check out the one year spread - when it gets to 12 then it will be time . storage goes for about .95 per month - so about 12 the fun will begin. If this happens - and the near month drops - then go long!
Not sure that theoretical limit of Cushing is correct - I did see that article as well - and had two different numbers related to capacity. BTW - they said the same last year.
Storage cost is going for .95 a month per barrel. When the one year spread on the curve gets to 12 - there will be demand on the short -end for the physical asset. Should be the bottom? The long end was barely down today - all the pressure was on the short end.