Commodities Guru Frank Holmes Explains Why Oil Production Will Tumble

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Dec 04, 2014
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If you want to understand why the drop in oil prices is temporary there are two things that you need to be aware of.

1) Oil demand growth is relentless. The EIA is still projecting that global oil demand is going to increase by 1 million barrels per day next, and the year after that, and the year after that.....

2) The rise in production has been entirely from North American shale which has hyperbolic decline rates. Crimped cash flow, and tight debt markets means a big reduction in drilling. Without a continued frenzied pace of drilling production will fall quickly.