| > Oil prices are unlikely to ever reach the highs of $100+ ever again. Since the oil price crash, investment in exploration has gone down dramatically, so I would argue the contrary. When the current supplies start to dwindle, I would not be surprised to see oil prices strike $200 or more a barrel. The oil crash removed the cost of exploration from oil prices, so current prices are no longer a indication of probable future supply. There's a multi-year lag between exploration and crude coming to market. While futures/derivatives can cover that exploration for future crude extraction, there's a growing spectre of competitive alternative energy that will likely reduce the attractiveness of crude – i.e. there being higher risk of relative oil obsolescence, the anticipated return on futures diminishes, meaning less money going into exploration, even with what will be present-day high prices. Given the lag in investment, I suspect that when the "spike" comes people will look as much to ramping up more immediate alternatives (solar, wind) than exploring for oil. The above is all speculation of course, but the 5-10 year market forces at work are not pushing towards lower or even stable oil prices, but towards much higher ones – at least until demand drastically drops, which some figure is at least 15-20 years out. Just my 2¢. |
The fracking technology for oil and gas is still on it's Moore's Law curve and is getting cheaper and cheaper so in fact more and more fracking is coming on-line so that we're unlikely to see prices much above $50 per barrel.
Mar 21, 2017 https://www.bloomberg.com/news/features/2017-03-21/big-oil-s...
April 12, 2017 https://www.bloomberg.com/view/articles/2017-04-12/u-s-shale...