W&T OFFSHORE INC. - WTI - 12/03/2023 (GMT)

The oil market is tired of production growth
The mood was to buy everything and sell oil.
The price of oil fell sharply during the last 4 weeks.
US oil rigs rose 5x in Baker's latest weekly count.
But OPEC+ now has about 5 million barrels per day of spare capacity, and there is still no sign of a slowdown in U.S. production growth.
It was hoped that demand growth next year would absorb OPEC's excess capacity, but even OPEC is only forecasting demand growth of 2.5 million bpd.
So it will take another year like that for the oil market to activate
Meanwhile, US production continues to expand with help from Canada, Guyana, Iran and Venezuela.
Worse, it is likely that this OPEC discipline has caused the constraint.
There will be no further declines and there is a very real possibility that next year we will see something like a battlefield in the stock market leading to oil at $40.
Now that's great for curbing inflation, but it puts most private oil companies at a disadvantage.
So, the market is going to start pricing in a real mess in oil next year.