From the overnight:

  • Goldman warns $2tln of future investment is at risk given lower oil prices (i.e below $70/bbl Brent long-term
  • To get these projects running would need “costs to come down by 20%-30%” or industry consolidation (for example, M&A to get low cost, less complex projects)

Goldman says further

  • That they “estimate the de-bottlenecking of the oil service chain and the unwinding of a 15-year inflationary bull market in oil investment can achieve 20% cost deflation”
  • “Slowdown in US shale production will bring the physical market back to balance by the end of this year”