11-02-2020, 09:41 AM
Oil will always be a cyclical industry, it's just the nature of the beast.
Demand moves according to worldwide GDP and supply ebbs and flows based on price moves and new discoveries. So it's a big pendulum swinging back and forth, with prices moving according to lots of variable.
I don't know what oil will do 5 or 10 years from now, my only point is that I do believe price will eventually recover again, just as it always has in the past.
Worldwide demand will continue moving higher as long as COVID eventually runs its course and there continues to be 2.8 billion people in China and India that strive for a better and more comfortable life.
The vast amount of budget cuts to exploration budgets by majors and oil producing countries means that supply will fall. It may not fall in a straight line, but depletion never rests, so it will happen. You can't continue to cut billions of dollars from exploration budgets without it eventually mattering.
It's a tough sector to invest in because of the volatility, and this has been a historic downturn, so I completely understand those ready the throw in the towel. I'm just not ready to do that yet.
Demand moves according to worldwide GDP and supply ebbs and flows based on price moves and new discoveries. So it's a big pendulum swinging back and forth, with prices moving according to lots of variable.
I don't know what oil will do 5 or 10 years from now, my only point is that I do believe price will eventually recover again, just as it always has in the past.
Worldwide demand will continue moving higher as long as COVID eventually runs its course and there continues to be 2.8 billion people in China and India that strive for a better and more comfortable life.
The vast amount of budget cuts to exploration budgets by majors and oil producing countries means that supply will fall. It may not fall in a straight line, but depletion never rests, so it will happen. You can't continue to cut billions of dollars from exploration budgets without it eventually mattering.
It's a tough sector to invest in because of the volatility, and this has been a historic downturn, so I completely understand those ready the throw in the towel. I'm just not ready to do that yet.