Oil. A view from the inside.

The trouble with blogging about the oil industry in a downturn is that everybody – including myself – yearns for that one news article that departs from 18 months of lay offs, collapsing investment, cancelled projects, idled rigs, perpetual oversupply, failed OPEC meetings, and every other piece of misery inflicted upon the ever optimistic among us.

To appreciate how industrial depression and the inevitable but necessary financial wringing can filter through the human side of the industry, one has to have witnessed for themselves the impact.

And that’s where I feel worthy to step forward.  But first, let me explain a few things…

I have had the good fortune to thus far avoid the offshore cull.  My specific role shall remain anonymous, lest my employer takes umbrage at my point of view, but my job is that of a specialist who rarely visits the same rig twice.  Ad-hoc is the way of life, always on edge 24/7, knowing a call could come at any moment to politely inform me of offshore check-ins or flights to foreign destinations.  It’s not a bad life, nor is it a steady life, but it pays the bills and expands one’s cultural horizons.  It also expands exposure to oil related chit-chat, and tales of hard luck and good fortune.

Presently, good fortune is a tough catch.  Current talk of good fortune is not having been chosen to join the tens of thousands who now earn their living outside the concerns of oil and gas.  Current good fortune is comparing how much your salary has been cut by and feeling grateful that you had less of a hit than the guy next to you in the tea shack.

But that’s all about to change.

We are, without a doubt, in the final throes of the downturn.  Sure, an oversupply still exists, but those damned mathematics don’t stop for anyone or anything.  Those damned mathematics dictate the turning point.  Not the Saudis, not the U.S, not the Wall Street betting shop, nor OPEC.

The mathematics.

With a worldwide rig count so low an amputee could count them on their fingers and toes, it doesn’t take the next Alan Turing to figure out that supply is at the edge of a very deep precipice.  The vulnerabilities in supply were stark only last week when a Canadian wildfire and an attack in Nigeria were enough to cause Brent futures to edge towards $50.  Imagine the carnage when J.R and the good ol’ boys wake up and realise that the market has balanced and is edging towards an under supply scenario, and there’s an 18 month lag to get those idled rigs back out there.

That, my friends, is the news story we all yearn for.  And it’s probably being drafted right about now.