Financial Post: The untold story is at the front end of the supply chain. The iron equipment that works to put oil into storage vessels is going idle the world over. by Peter Tertzakian
'Every week, an increasing number of drilling rigs are hosting weeds and barnacles. That’s of concern, because fixating on inventories for any product is a narrow thought process. Think of it this way: There are no worries when there is plenty of food in the fridge; but unease about the future sets in when farmers stop planting their crops.
'Except for the Middle East, the number of active rigs in every region has retreated to mid-2000 levels. But oil consumption is going the other way; compared to 10 years ago the world burns over 10 million more barrels a day of the vital commodity.
'Oil producers began slashing their exploration programs in January 2015, over 18 months ago. Back then there were 982 spinning drill bits outside Canada and the United States. Now there are only 677, a drop over 30 per cent. And the number will go lower yet.'