Global oil supply far exceeds demand right now as the coronavirus pandemic keeps travel restrictions in place and commuters working from home.
Commodities analysts Leigh Goehring and Adam Rozencwajg, managing partners of Goehring and Rozencwajg, argue that the pandemic and current oil market conditions will be a catalyst for a coming global energy crisis. They think we're not far from a global oil shortage because of the lack of investment happening today and the rapid depletion of the best US shale resources.
While some analysts expect shale production to keep global oil markets in a perpetual surplus, Goehring and Rozencwajg argue that the age of shale has largely passed.
They project US oil production to fall by as much as 2 million b/d in the second half of 2020 and by as much as 1.5 million b/d in 2021. They see global demand rebounding steadily, which will lead to a spike in prices and an eventual drilling boom five years or so down the road.