What do you think are the chances that oil has been inflated and once the bubble bursts many of these drilling and related operators will not have enough ROI to pay for all the equipment in the field now?
It would be world of hurt to see 80’s style storage yards with rig’s, trucks, skids and equipment lined up behind chain link fences waiting for an asset auction while 10’s of thousands of roughnecks are trying to figure out how to get around and look for new work after their “Trans-Am” has been repossessed.
I think demand is fairly constrained, people are using less than the would like to use, due to high prices and poor economy. Significant amount of people, even world wide, are in a difficult economy. This has reduced consumption from its potential once the economies recover.
However, enough countries are still growing consumption to bring the world wide total into a slow growth and has for a while.
So I don't see the present conditions as a bubble. This isn't a time where most are flying high and overconsuming compared to a stable rate. I think consumption will continue to grow globally.
In North Dakota it is still the Camaro, not the Trans Am. To graduate from many highschools in ND you have to be able rebuild a Camaro engine with a blindfold on while sipping Everclear.