Thank you for engaging in this conversation, my knowledge of this issue is rudimentary so I appreciate the discourse.
My next question is if demand is the primary driver of the market, can you explain the current price of crude oil being 2x what it was in 2019 when the demand was slightly higher?
i haven't listened to the latest odd lots, so i'm at risk of being pre-contradicted, and a lot of the ground was covered btwn your post and my answer, but i'll try to address it and add a few other comments.
1. oil prices are extremely volatile! the basics of this are that oil demand is relatively price insensitive, hence when there is an imbalance btwn supply and demand, price moves a lot more than demand does (see price chart here, plus a lot of other good info). so relatively small changes in demand or supply can and will cause large swings in price.
https://fingfx.thomsonreuters.com/gfx/ce/znvnejyjypl/OIL%20PRICE%20OUTLOOK%20FOR%202022-2023.pdf2. my view, and god knows i've been wrong trying to predict oil price moves far more than i've been right, is that if the 2020 pandemic hadn't come along, oil would have moved higher in 2020 because years of underinvestment following the sustained slump in oil prices starting in 2014 would have finally caught up. instead, demand crashed, oil cratered and 2020 saw a massive retraction in oil supply in response. imo, it is an open question whether the price action in late 2021/early 2022 is primarily a short-term reaction to the destruction of investment in 2020 or part of a longer-term cycle resulting from underinvestment from 2014 on. i'm betting on the latter, but as i said, i've been wrong on this stuff a lot, and there are people that know far more about oil markets than me on both sides of that debate.
so, anyways, leaving 2019 aside and turning to some of the subsequent comments, especially regarding who is and who isn't bringing new supply to market and why, my feelings are that most of the commentary for investors about having restraint and not flooding the market is complete bullshit. yes, investors are leery about companies pursuing growth, because they've been losing money for the last seven years and they're rough ridin' tired of it, and companies are somewhat responsive to that. but oil companies aren't going to leave $100 oil on the table because they think their little 30k barrels/day west texas play is going to crash the market. never have, never will. imo, and not necessarily in order, the reasons (especially us/canada shale) companies are a little slower to invest in bringing new production online than they might be are:
1. uncertainty about future oil price.
2. they don't have high quality land to drill (see the part about majors being quicker to add new production than independents - majors, in general have better opportunities)
3. they're still up to their ass in debt and covenants prevent them from spending on capex until they pay more back
4. they're lying to investors and are getting ready to drill, baby drill as we speak
5. sorta the same point as #1, but the saudis put the fear of god into them and it'll take a bit of shaking that off
6. peak oil demand/rapid ev adoption has made investing in longer-lived projects questionable
at any rate (and mostly for kk), my advice as an investor would be to sell too early rather than too late because there's no way in hell they don't produce themselves back into cheap oil again before too long.