By Gail Tverberg: Why Oil Forecasts are Too High

Oil companies were not profitable in 2013 when oil was $100 per barrel. The investment required to maintain existing production levels has been increasing at about 17% per year because the oil that’s left is harder to get. Oil companies today need $130 per barrel to be profitable but the price is $60 because consumers cannot afford $130 oil.

We can expect trouble.

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