1: Could oil hit $100? The chart below compares oil prices and oil sector capital expenditures (i.e. investment in exploration and drilling). The blue line is really what I want you to focus on. Capex has relentlessly declined since around 2010 and today sits at historic lows. This lack of investment will result in lower production volumes hitting the market and less spare capacity to ramp up supply when prices rise. It’s simple: supply vs demand. With demand predicted to hit 100 million barrels a day this year, oil prices could hit triple-digits.
$100 oil?
$100 oil?
$100 oil?
1: Could oil hit $100? The chart below compares oil prices and oil sector capital expenditures (i.e. investment in exploration and drilling). The blue line is really what I want you to focus on. Capex has relentlessly declined since around 2010 and today sits at historic lows. This lack of investment will result in lower production volumes hitting the market and less spare capacity to ramp up supply when prices rise. It’s simple: supply vs demand. With demand predicted to hit 100 million barrels a day this year, oil prices could hit triple-digits.