MacroVoices Crude Oil Special Double Header


  • Heinrich Leopold

    Art, thank you for this excellent publication, which completely reflects also my opinion. Shale produces mostly light distillates, which increasingly decrease in price due to oversupply. This explains now the underperformance of many Shale companies in relation to the oil price. It is interesting that BP and Shell, which have little Shale exposure had excellent results, whereas ExxonMobil and Chevron carrying high Shale exposure, had disappointing results.

  • Curt zimmerman

    I follow Art religiously and have a lot of respect for his insight. That being said I can’t help but feel that he is missing some X factor that is causing the price of oil to continuously stay low for years now.
    I think of Boone PIckens, also an expert in oil who kept saying that oil would rebound only to be proven wrong again and again, until he finally gave up. The fact is that with everything Art says
    The fact is that the the oil is still there ever abundant with the US up to 10 million barrels a day. I just think he is missing something.

    • Arthur Berman


      Apologies for the late reply and thanks for your thoughts.

      There is an important difference between Boone Pickens’ belief that oil price would increase and my contention that it should because I showed physical reasons that are not included in what I believe. The market generally cares little about fundamentals in the short term. Over time, however, the market always adjusts to those fundamentals.

      Today, the market is ruled by sentiment. It is obsessed with the specter of a tight oil production surge and bearish statements by the IEA, EIA and various investment bank analysts. Although it is true that U.S. output has reached an all-time high, most of what the market is considering are things that have not happened yet. There are also a chorus of voices including the IEA that are warning about an impending supply crisis because of lack of E&P investment. This has not happened yet either but points to a different outcome.

      Abundant and affordable are different issues. The average 2015-2017 WTI price is more than double the average 1986-2004 price in constant Dec 2017 dollars.


      Tight oil is simply more expensive to develop than the conventional oil that sustained the world until 2010.

      It would not surprise me if oil prices move lower or don’t increase much beyond current levels over the next few months. I expect that the decade-long increase in constant dollar oil price will continue barring a collapse in the global economy (not impossible).

      All the best,


Leave a Reply

This website uses cookies and asks your personal data to enhance your browsing experience.