Where Is That $100-A-Barrel Oil? It’s Coming According To One Expert
A little over a year ago there were some ominous words coming out of the mouth of one of the oil industries leading analyst. That analyst, Gary Ross of the PIRA Energy Group told anyone that would listen that the price of oil was about to take a dive.
Mr. Ross obviously knows his business and this industry because where the industry sits today has been well documented.
Ross, also made another bold prediction on or about the same time he was forecasting the slump in prices. He suggested that $100-a-barrel oil would be coming and it would be coming sooner than later.
Ross does appear to be on a bit of an island in his prediction. In report by Bloomberg News other analyst like BP Plc Chief Executive Officer Bobby Dudley and Saudi Oil Minister Ali Al Nami are diametrically opposed to his line of thinking. The basic consensus of the industry is that the market is dramatically over supplied.
So why does Gary Ross say that within 5 years the world will be over a $100-a-barrel for oil?
According to the Bloomberg piece his opinions are based on the belief that the production side of the industry has slowed so much during the current downturn that when the need to ramp up production comes no one will have the ability to deliver.
His group is also speculating that world wide demand for oil is greater than what is predicted and with producers having little or no ability to match that demand with instantaneous production the price will begin to climb significantly. Ross sites world geopolitical events such as dealing with The Islamic State as threats to production. He also says fuel consumption demands in the United States, Europe, and Japan will exhaust the over supply faster than many analyst are predicting.
$100-a-barrel oil would certainly be a boon to jobs in Louisiana but it would also make the price of driving a lot higher than most people have gotten used to. So, who is right? The man who accurately predicted this downturn or those that stand to profit by playing it close to the vest during the downturn in pricing. I have to admit my conspiracy theory senses are tingling quite a bit as I think about the scenario that could play out over the next five years.