I'm beginning to think we are suffering a crisis of crisis management in politics and in business. Painfully obvious case in point: President Trump's firing of James Comey. Trump has every right to fire the FBI director, but the fatally flawed execution added a new chapter to the dominant "White House in disarray" narrative and turned up the volume on the investigation of Russian interference in the 2016 election, rather than making it go away, as Trump expected. 

What would I have recommended? Well, once a decision is made, it's time to get everyone on the same page. Trump kept his plan to fire Comey within a very tight circle, then failed to widen that circle before the news broke. Senior White House aides found out the same way as Comey: on TV. The time to loop people in and agree on a strategy is before you tell the public, not after. 

And, as you brief people internally, be clear about what's happening and who is in charge of the message. The Trump White House offered multiple rationales for firing Comey and assigned multiple messengers to deliver the news. It was a full-on debacle that did lasting damage to Trump's already shaky credibility and the GOP policy agenda.

A corporate analogue to this is United Airlines' bungled defense of its treatment of a passenger who did not want to give up his seat. United CEO Oscar Munoz went with his first impulse, which was to defend United employees and blame the customer, Dr. David Dao. He took the view that if police ask you to get off the plane, you should comply, not fight back.

But planes are full of beleaguered passengers armed with smartphones. And Dao's fellow travelers could see that he was not being unruly or drinking too much. He simply did not want to give up the seat he had paid for, and they identified more with him than with United or the police. Finally, physically harming Dao, who suffered a broken nose and teeth and a concussion, was far worse than his refusal to deplane. Munoz corrected course, but not soon enough to avoid inflicting significant damage to United's reputation and brand.

It's easy in moments of crisis to panic and close ranks. But staying calm is essential to controlling the narrative. President Trump has not yet grasped that he's no longer the CEO of a family business or the host of a reality TV show; he thinks he can be as freewheeling as before. United lost sight of the fact that they are still in service to their customers, not themselves, and there is a limit to what even airline passengers are willing to accept.
No matter who you are, losing sight of those to whom you are accountable - passengers, customers, the American people, Congress - can inflict long-term damage to your public image. Decide on a unified message, accept responsibility, and meticulously follow a set of procedures, and you can minimize or even avoid harm and ride out the storm.

Last year, while speaking on an American Bankruptcy Institute panel, I predicted the West Texas Intermediate (WTI) oil prices would not rise above $50 per barrel (bbl) for any sustained period. A year later, my forecasts have not only held true, but increasingly seem bullish. Current conditions indicated that $40 per bbl is the new ceiling. Low-cost United States producers who can weather these prices should do well over the longer horizon. High-cost producers are trapped in a death spiral, moving ever closer toward an oil-based black hole from which there is likely no return. 

The short answer for these conditions is that global markets face a severe oil supply overhang. While demand has typically grown by 1.0 million barrels per day (mbpd), daily supply has historically been within 0.2 mbpd, with stabilizing support from OPEC (Organization of the Petroleum Exporting Countries). This pattern materially changed in 2010.

As the globe recovered from the 2008 financial crisis, demand for oil accelerated by 70% to an annual pace of 1.7 mbpd. Daily demand sometimes exceeded supply by 1.5 mbpd. Prices quickly rose above $100 per bbl. The fracking revolution took off as producers struggled to meet this new demand.

Higher prices attracted new fracking participants. By 2014, shortages of labor, housing, and general infrastructure plagued many fracking markets. Then oil stores grew. By mid-2014, supply exceeded demand by an average 1.0 mbpd. WTI prices plummeted below $50 per bbl; a general break-even price for many U.S. fracking wells. 

 
U.S. producers shut-in wells, temporarily halting production and stemming costs on a rotational basis. This practice spared producers the cost of permanently plugging wells. This reduced supply, but allowed producers to increase production as prices improved. As prices rose above break-even levels, supply came online pressuring prices lower. These conditions set the stage for a $50 per bbl ceiling.

But break-even prices kept falling. Producers improved well designs, employed multi-pad drilling, and lengthened lateral drillings among other enhancements. The next revolution may involve replacing water extraction with CO2, further reducing production costs.

Outside of the U.S., many countries face significantly higher break-even prices and in some cases are also heavily reliant on oil exports. Oil-dependent Nigeria, Russia, and Venezuela, have break-even prices exceeding $80 to $100 per bbl. Their hope for higher prices hinges on reducing global supply. 

 
During 2017, a consortium of both OPEC members and non-members targeted a reduction in production of 1.8 mbpd. The result: the consortium managed to reduce production by 1.2 mbpd in the first quarter. 

 
American producers-not bound by the OPEC led production cuts-have unsurprisingly increased production. U.S. rig counts hit two-year highs. The United States, once dependent on foreign oil, is quickly becoming oil independent. Further, the United States is strategically acting as an energy exporter (starting with Liquefied Natural Gas (LNG)), minimizing scope for countries like Russia to use energy as a political weapon. 

 
OPEC's plan to reduce production is suffering fissures of its own. In its May report, the cartel's production rose by 1% off of increased production from Iran, Libya, and Nigeria. In the U.S., expected seasonal oil stockpiles fell 1.0 million barrels less than expected, while gasoline inventories rose by 2.1 million barrels.

As prices continue to fall, high-cost producers will reduce capital expenditures, exacerbating their situation. Canada will reduce capex by 50% in 2017. This is unsustainable, leaving such producers with a smaller footprint in the global markets. U.S. producers, among the most efficient in the world, should benefit both domestically and with increased share of global exports.

In summary, oil will continue to be plagued by supply problems. Efficient U.S. producers benefit over the long-term. However, in the shorter term, expect the dying salvo of higher-cost producers to drive oil down to $40 per bbl - and even the mid-$30s per bbl.