Oil - the supply side response is shaping up

Brent crude touched a low of around $27.50, and has since risen around 28% to $35.15, over the last 3 weeks. We saw a similar 25% bounce back in Aug 2015, only to then see prices retrace to new lows. The most recent speculation is around co-operation between Russia and Saudi Arabia, raising hopes that OPEC led supply may be reduced. Whilst trying to predict the price of oil, in the short term, is a thankless task, increasingly, you can see the pressure on the supply side response coming to bare. That is, oil producers increasingly cannot service debt, and oil dependent governments have holes (canyons) in their budgets, that they need to address. We look at the way these issues are playing out. (VIEW LINK)