"Oil demand will rie, but will supply keep up? I fear not...

"Oil demand will rie, but will supply keep up?
I fear not personally. But time will tell.
Expect therefore oil prices to rise."

I am almost certain that over the next 2 to 3 years the price of oil be a lot higher than its long historical average, and I would not be surprised if it rose to over US$100/bbl again at some point in coming years (it is at a 7-year high now).

Because what we are seeing, I think, is a supply-side shock in the making, analagous to what happened in the period after the 1998 Asian financial crash through to the synchronised global recession of the early 2000's, during which there was a significant stalling in investment in oil and gas exploration and development.

The result was a market deficit that commenced in about 2005 and persisted for almost the next half-decade.

According to leading energy consultancy, WoodMackenzie, current global expenditure on oil development and exploration projects is running at a little over US$300bn pa, which is about half the level required to sustain global production levels (denoted by [*] in the chart below:



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