Sunday, July 2, 2017

Oil price will eventually spike due to under investment in exploration

ZeroHedge:

There will be an extremely painful oil supply shortfall sometime between 2018 and 2020. It will be highly disruptive to our over-leveraged global financial system, given how saddled it is with record debts and unfunded IOUs.

Due to a massive reduction in capital spending in the global oil business over 2014-2016 and continuing into 2017, the world will soon find less oil coming out of the ground beginning somewhere between 2018-2020.

Because oil is the lifeblood of today's economy, if there’s less oil to go around, price shocks are inevitable. It's very likely we'll see prices climb back over $100 per barrel. Possibly well over.

investment into new oil finds



New oil finds


Oil is a depleting asset. Every barrel pumped needs to be replaced with a newly discovered barrel. Due to the low prices for oil discoveries of new reserves has plunged. Eventually demand will run into supply and the world will see another price spike.

I think oil prices will have one more drop and then we will see a move higher in prices.

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