>>54665106Oil prices aren't coming back up anytime soon. What you're witnessing is a deflation scenario; oil prices have been dramatically overvalued since at *least* 2009. We all saw production skyrocketing coupled with demand plummeting, yet prices weren't budging. So we knew when the price drop came, it would be very sudden.
This means that capital costs of oilfield development were also inflated. When oil prices dropped very suddenly, it rendered a big chunk of those investments (at the inflated capital costs) completely uneconomic; a lot of these shale companies were taking on debt very aggressively to expand production and operations. These companies will soon go belly up and sell their assets for pennies on the dollar to majors who are sitting on mountains of liquid capital.
For example, Chevron took on a cash position since 2009/2010 and is currently the most liquid oil major. They did this because they knew that oil prices were inflated and they would be acquiring defunct independents left and right within less than a decade after prices crashed. It's why they hired R. Hewitt Pate in 2009, whose background is in the U.S. DOJ doing anti-trust litigation; they're going to make several moves that will make them look like a monopoly. (The ultimate goal is to reunite Standard Oil, btw.)
Now, even though oil prices won't be going up anytime soon, the economics of these projects *will* stabilize as capital costs deflate and the market equilibriates. So jobs will be coming back in full force--just at a much lower pay. But since your dollar will be worth more, it won't be lower purchasing power.
t. retired veteral of the oil industry (engineer, planner, manager)
