I should have added, I also see Saudi Arabia preparing for a more extended price of $60~70 a barrel, rather than the ~$100 they needed to match past government spending.
OK then we are getting somewhere and not because you agree with me. (more and more I am seeing that as a criteria others use for gauging progress in discussion).
I suggest that KSA is drilling as much as they are to manage their own decline and perhaps and hopefully provide a brief period of high initial production to continue being able to “flood” the market. High IP is easily achievable in accessing undrained infill positions within a water flood such as most of their fields. It has been done many times before to boost the books so to speak.
Both EIA and IEA data suggest the trend is between .5 and 1.2 mmbo/d in “excess” production. At the current conditions clip that is exhausted in less than one year. In the past price has increased when convergence is achieved and not when the storage is depleted. Thank goodness for that! Otherwise we would not have had the cushion against shortages and devastating price spikes while the industry tries to get back on a footing to produce the oil that is needed.
I think it is interesting and pertinent to note that the industry is expected to manage supply to within about 0.4% of demand and there is a “glut” where the world is proclaimed awash with oil. Such a dead band of control is absolutely unreasonable for a behemoth such as this industry. The inevitable outcome is over control and wild swings to something resulting in equally wild swings in price. If you were to control the temperature of your house to such a degree you would have a dead band of about 0.28 degrees F. The result of that effort would be short cycling of your HVAC and probably burning it and maybe your house down. It has happened before.
As I have noted before, 60ish is not economical for most regions of the world to convert resources to reserves and new production. Oil is too hard and too costly to find and produce now. We will not run out anytime soon but we are running out / have mostly run out of the easy and cheap stuff. I am doubtful that they or any other small group of their ilk that can afford to provide new supplies can do enough to prevent shortages and thus, if they persist and are acceptable in holding prices to the 60/70 range another price spike will ensue worse than the last one and so it will go over and over again as they attempt to do what is now impossible, control market share and for what? A combination of low price and high volume of less revenue than letting the market take its course? I just can’t figure it.