Publications: Notes at the Margin

Short-Run Fundamentals Point to Higher Prices; Long-Run Fundamentals May Point to Bankruptcy for Large Oil Companies  (April 21, 2014)


Two distinct views on the direction of oil prices proliferate today. Ed Morse, Citigroup’s head of global commodity research, and his team foresee crude at $75 per barrel in the near future. Chevron CEO John Watson sees "$100/bbl becoming the new $20/bbl in our business." We think both views are right and both views are wrong. In the short run, fundamentals point to higher crude oil prices. In the long run, though, companies betting on much higher prices will likely face bankruptcy.


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