Friday, 26 October 2018 12:11

We are Entering a New Era for Oil

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(Houston)

The oil market has been in an interesting period since at least 2014. In the years prior, many had been worried about the concept of peak oil, or the idea that the world was past its peak output of oil and that supply would grow ever tighter. Then the shale boom happened and the world was suddenly floating in the stuff, causing prices to plummet. Now we are somewhere back in the middle as there are genuine concerns about supply at the same time as growing demand. Shale growth is slowing in the face of capital constraints and pipeline issues, and “The Saudis are just about out of spare capacity”, according to a top energy adviser.


FINSUM: We think the concerns over supply are legitimate enough that they will be supportive of prices even if we are slowly headed towards recession. That said, we think more supply will come to market to meet demand than many anticipate.

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