Oil Supply Shock, Soaring Prices Coming in Next Few Months

Last month OPEC’s oil production fell short by 3.58 million barrels per day (bpd), which is 3.5% of global oil demand. The U.S. continues to sell oil out of the Strategic Petroleum Reserve, nearing the end of what can be sold off. And Russia’s oil exports could fall by some 2.4 million bpd after the EU embargo enters into effect in December. Add to that mix the observation by Saudi Aramco's CEO, who said last week that years of underinvestment in oil drilling infrastructure have damaged the balance between supply and demand in the oil market, and what do you get? According to OilPrice.com's Irina Slav, "a [oil] supply shortfall on a global level is imminent." In other words, an oil supply shock and skyrocketing prices for oil are on the way.

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