From Forbes
The oil patch in 2016 resembles the sequel to “There Will Be Blood,” with massive layoffs and plummeting capital expenditures, such that expectations of a tightening market and renewed oil price surge are widespread. The chaos in the upstream sector, blindsided by a collapse in cyclically high oil prices, has some thinking that markets will be whipsawed in a few years because of current underinvestment. T. Boone Pickens is probably the dean of oil price bulls, arguing that lower investment will balance the market sooner rather than later and a $70/barrel price is imminent, but even the IEA warns, more cautiously:
“On the supply side, the decline in current upstream spending, estimated at more than 20% in 2015, results in the combined production from non-members of the Organization of Petroleum Exporting Countries peaking before 2020 at just above 55 million b/d, IEA forecasts.”
