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2017 Oil Log

Following is a log of oil issues as 2017 closes:

Perfect Storm - Oil Prices Will Rise

The foundation for why we believe oil prices will rise higher are based on the following theories:

  1. Overconfidence in the U.S. shale industry, which leads to capital expenditures being diverted from supplies that would have guaranteed more stable long-term supplies to short-cycle supplies;

  2. lack of capital investments in global oil supplies, resulting in faster decline rates;
  3. years of low oil prices fueled demand spikes that will be inelastic to oil price rises in the future;
  4. the fall in the U.S. dollar is a natural boost to global demand; and
  5. high storage leading to complacency on geopolitical risks boiling in the Middle East.

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