Underinvestment guarantees long-term oil supply deficit
The guest argued that chronic underinvestment in sustaining capital will lead to a structural oil supply shortage by 2029–2030, making energy a highly attractive long-term investment.
The argument
The industry has reportedly been underinvesting by $1 billion to $2 billion daily in sustaining capital, a trend exacerbated by geopolitical conflicts in the Gulf and Russia where state revenues are diverted away from oilfield maintenance.
The thesis, stress-tested
✓ What validates it
- ✓Sustained low capital expenditure reports from major oil producers
- ✓Widening valuation gap between Canadian and US energy equities
▸ Risks discussed
- ▸Near-term price drops if peace breaks out in the Gulf or Ukraine
- ▸Political and regulatory risks in Canada
Hear it yourself
"And so in my own personal circumstance, my investment in the silver stocks has substantially outpaced, the silver market and and I guess the silver equities market too. How that works out to going forward in the near term, I can't say. What I can tell you is this. At the time I made the decision, it appeared to me that if the silver price went up, the silver stocks would go up too. If the silver price went sideways, the silver stocks were discounting $42 an ounce silver in a $75 price environment, so they could provide some shelter for me. And if the price went down, the same circumstance applied."
02:18
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE