I hear ya, I understand the long-run of it, but, as you’re alluding to, Oil Wells aren’t light switches..

Shutting them in is a dicey proposition, sometimes, they never comeback, and even if they do, it’s still an expensive proposition.

LSS: in the short-run MCOP is a useless guide..

JJ, above, delineates some of the other examples to be spied..Pilgrim’s Pride is an epic example.
http://www.thefreedictionary.com/spy

Producers will produce at a loss over the short run if they can cover their variable costs. Fixed costs and profits (the contribution margin) will be ok at $0.00 or a little less for a while. Eventually, production will have to be withdrawn if variable costs can’t be covered. This will remove supply and cause prices to rise. Of course, with something that has such massive barriers to entry as large volumes of oil, this would have to be a slow and jagged process. If production shuts down, it will take along time to ramp up again. Thus, producers will probably run at a loss for a longer time than, for example, a hamburger joint. New players in the business require special qualifications. Theory in action.

It worked in the housing industry – do you see any house owners underwater? I sure don’t
It worked in the auto industry – do you see anyone with car loans in excess of price? I sure don’t
It worked in the chicken/ag industry – ask Pilgrim’s Pride

It works every time. In fact, I think I am going to put $100K into a lemonade stand with 10 dixie cups at the ready.