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The key is not OPEC or Russia. It is US shalers who do appear to have made the shift from investment-intensity to profit-maximization. I doubted this earlier in the cycle but the evidence is in. We’ve barely touched the WTI $80 and the US rig count is rolling over:
Following is a good piece from BofA. Their price average is too high for 2023 given they are not factoring in the global recession and China accident but the dynamics for arguing a new and higher base for oil beyond are sound.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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