In my opinion, the age of cheap oil is over. We haven't run out of oil, and we can even continue to increase the amount we produce every day, but to meet the world's demand for oil, we need high oil prices.
(click to enlarge)
I think our new sources of oil dictate that. Those sources are the oil sands, tight oil and deepwater offshore. For this oil to be available for consumers, oil companies have to be able to produce it profitably.
And according to most sources, including Sanford Bernstein (below) the price of oil that these sources need is something north of $90 per barrel.
As time goes on, I believe that marginal cost of production...
|FREE||SA PRO MEMBERS|
|IDEA GENERATOR||X||Exclusive access to 10 PRO ideas every day|
|INVESTING IDEAS LIBRARY||X||Exclusive access to PRO library of more than 15,000 ideas|
|SECTOR EXPERT NETWORK||X||Exclusive access to all sector experts for direct consultation|
|PERFORMANCE TRACKING||X||Track performance of all PRO stock ideas|
|PROFESSIONAL TOOLS||X||Professional Idea Filters to zero-in based on industry, market cap and more|