mpkirby

Oil Will Peak at $150-200 - Barron's Interview

I don't believe the comparison to the 1980's is necessarily valid. In the 1980's there was significant excess capacity driven by investment that occurred during the high prices of the oil shock.

Although there is tremendous investment underway now, much of the early news is that there isn't going to be a lot of new flow (key word there is flow).

Declining fields are consuming most of the new production, and new production is not "easy" oil.

So while the conditions around investment and consumption are similar to the 1980's, the flow rate on existing and new fields are not. Consequently unless demand drops more than 4% per year, I don't see a let-up in price pressure.

Mike