I laid down 18 rigs in less than 30 days during August and September of 1982. Some drilled to casing point and stopped and some just stopped and plugged. Those were miserable days and there have been a lot more since then. A lot of kids have gotten suckered away from potentially decent careers with larger stable companies to smaller ones that just won’t make it through this. I feel sorry for them but lessons have a price. Some will have made a bit of gain but most will not.
This has gotten silly. A 1% or so out of balance excess and more than a 50% drop in price? Absurd. I have been astounded since the first test trade of futures in October of 1984 that the largest industry in the world has allowed themselves to become no better off than farmers as commodity price takers. I expected back then that somehow the industry would shut down NYMEX or buy them out.
And still people complain that the price of gasoline is too high. As an insider even I was shocked when I drove past the station today and saw 1.68 a gallon. My almost instant reaction was, “That’s too cheap. I should fill my tank before it goes back up.” I recall in ‘98 that at some point there was a sudden reduction in motor fuel stocks because it got so cheap everybody got greedy and started keeping their tank full to the brim. I can’t recall how much was moved from commercial storage to gasoline tanks but it was a lot.
Just playing with numbers...
250 million US vehicles.
http://www.latimes.com/business/autos/la-fi-hy-ihs-automotive-average-age-car-20140609-story.html
Say an average of 18 gallon gasoline tank. No idea if that is close to average, but I would guess between 15 and 20.
About 100 million barrels of fuel storage capacity in vehicles. If the average moved from 40% to 80%, an additional 40 million barrels from “stocks” to users.
That is more than half the gasoline refinery stocks in the US, almost half of the refinery and ULSD refinery stocks.
http://www.eia.gov/dnav/pet/pet_stoc_ref_dc_nus_mbbl_m.htm
It could make a difference.