Everyone says this is a cyclical industry and it makes sense. To the guys who have been through a few of these cycles how does this one compare to the others. I am not talking about 2007, that was nothing...
6 replies (most recent on top)
Been in the business 36 years and never missed a paycheck. I think this is the worst downturn I have ever seen, and just glad I am in the dusk of my career. Lay me off now,,,so what?
86-87 was about like now. The main difference is we didn't have internet back then.
Gas has always been a drill and bust business in this country. When the price goes up everybody drills resulting in over supply and the price goes back down near nothing. When demand increases beyond supply the price goes up then everybody drills and the price goes back down to near nothing.
Difference between this one and 1999-2000 is that back then the US could not ramp up oil production like it can now. If prices go up to a certain point this time, so much additional oil starts coming out of the ground that we didn't even think of producing back then. All we had was conventional, depleted oil assets and conventional and tight gas; long horizontals with huge fracs for oil weren't being done. To me I see this lasting a very long time (+/- $50 oil) unless there is a skirmish in the Middle East. I personally have left this business.
81-83 were bad with 1$ houses under AHMC and 18% interest rates, but this time under another but lesser IQ trudeau 2 it's not just political incompetence but complete divergence on reculatory/EPA/carbon tax costs with our biggest trading partners at a time of the most significant game changer of my 40 yr career, a technical shift to shale.
At a time when the US is pro-drill, canada has gone suzuki- green...then there's still the saudi's.... i suspect they will take the proceeds from Aramco sale and split to south France so perhaps OPEC costs may increase to the point Eastern Canada accepts Alberta oil...always a silver lining.....somewhere
Many come to memory but one in particular happened in 1999 - 2000 when the price of oil went from $40 a barrel to $8 dollars a barrel.