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Originally Posted by jyl

I asked an energy investor guy and this is his outlook. He may be right or wrong, who knows, but the thought process is the thing to pay attention to.

Maybe oil goes to $40 or $30.
Most shale producers hedged oil at $90 so they are fine well into next year.
They have a backlog of wells drilled but not finished.
They produce from existing wells and finish the backlog, don't drill new ones.
Existing shale wells see production drop 60-70 pct per year.
Around mid 2015, US production starts to fall.
With no or few new shale wells drilled in the preceding year, production decline will continue for rest of 2015
Oil financial markets anticipate this and start driving up oil futures and price before mid 2015
If Saudi pulls back production around that time oil price really rips higher
Maybe see oil rip from $40 to $90 in a few months
Oil users will start hedging $30-40-50 oil. Who hedges now will have a big advantage in 2016. Think what LUV did with hedging before.
Exploration companies probably see huge falls in business between now and 2016
Putin probably thinks this is all a conspiracy between Saudi and US.
Russia will try to start middle east unrest to drive oil price up.
Hand missiles out like candy, bonus for firing some, extra bonus for firing them into Saudi facilities, Suez, anywhere that threatens global oil flow
Saudis should be buying Patriot systems as fast as they can
US should be deploying littoral navy to ME
Oil and energy stocks are in the hands of traders working on technicals not fundamentals.
Trading driven by breaking levels not by any fundamental valuation
He's virtually zero the energy sector and ready to buy buy buy on oil breaking up through certain levels.

Again, this might be right or bullcrap. This is not investment advice!

But thought would be interesting for you all to see the "thought" process of "investors".

Nope The Puty Kat don't see it that way...