Undoubtedly, oil prices have been volatile in recent months, but according to Michele Della Vigna from Goldman Sachs, the oil industry is entering an age of aging rather than expanding.
According to Vigna, "the constraint" is observed in the investment sphere, and this will create a gap between production in the coming years. Consolidation is inevitable in this case. It is important to note that not only Goldman is of the opinion. Much of Wall Street's commodity analysts believe that the lack of investment in the sector could seriously hit the industry and later consumers.
Vigna added that while demand for oil is at record levels, the sector needs growth in production as soon as possible. At present, all investments in the sector are short-term. A perfect example of this is the shale deposits. Only the group called "seven sisters," which includes Shell, Total and BP, have invested in long-term projects, he said. "This leads us to a very tight market in 2020, when we will rely seriously on OPEC.
Source: Goldman Sachs
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