Where to from here? To me the message of the chart is this. Who wins out? The traditional view of oil depletion meets rising demand due to lower prices OR the concept of Fracting 2.0 where the cost curve continues to decline due to innovation at the drill bit. That’s my preference and a lower oil price fits with that. More pain in the oil patch. All those anxious buyers looking for a bottom would be disappointed. Think gold market 2014. All the bottom fishers eventually destroy themselves. I am not claiming a high level of certainty, just that is what the chart speaks to me.

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