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Beware of Crude Oil  'Super-Spike' Above $150

CommoditiesJul 11, 2018 07:31AM ET
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Investing.com - Two Wall Street firms have already warned about the possibility
of $100 a barrel oil in 2019.
Now another says prices could surpass $150 in the years ahead.


Sanford E. Bernstein says a supply shortage is inevitable if major oil
companies continue "chronic underinvestment " in exploration and production.


And that will trigger a "super-spike" in prices that could top the previous one in 2008 when Brent North Sea crude hit $147 a barrel.


Bernstein says companies slashed spending on exploration in 2014 when prices began
a sharp decline and have been relying on existing reserves to help meet demand.


But now that prices have since recovered to a three-year high,
companies are using their profit to reward shareholders with dividend
increases and share buybacks instead of investing in new projects.

Bernstein says that approach will backfire if global demand increases as expected between now and 2030.


Both Bank of America (NYSE:BAC) and UBS have warned oil prices could top $100 in 2019 because of supply disruptions from Iran, Venezuela and Libya. 

Beware of Crude Oil  'Super-Spike' Above $150
 

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Daniel Van In
Daniel Van In Jul 11, 2018 8:04AM ET
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ugh sorry i think this article is pants. yall just driving for a reaction..
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Martin Babei
Rubberduck1973 Jul 11, 2018 7:45AM ET
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No. The whole of euroe is moving toward wind and sun energie. Demand for oil will decline
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Eden Huang
Eden Huang Jul 11, 2018 7:45AM ET
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Really? No planes, trucks, trains and cars?
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