While speaking with Bloomberg, Statoil Chief Economist Eirik Waerness stated that oil prices would once again jump over the $60 a barrel price relatively soon. Waerness was speaking about the long-term outlook for oil on a timeline that extended to 2050.
What is Relatively Soon?
Waerness was not predicting oil would cross the $60 a barrel threshold overnight or even in the next week or month. But, he is confident in his position that oil prices will rise sooner rather than later. This prediction is based on the fact that several of the main economic factors depressing oil prices are not sustainable.
OPEC has been working to trim the global crude oil glut since last November when it output by 1.2 million barrels per day. However, this huge achievement was not as effective as hoped. The United States, Libya, and Nigeria each amped up production in the wake of the OPEC cuts.
Waerness noted that the current levels of production by these nations, especially in the American shale industry were not sustainable much longer. The oil glut will slowly dissipate over time, and oil prices will see a steady recovery. The key is for investors to exercise patience and to put themselves into the position to profit from this long-term trend towards higher oil prices.
Historic Lows Makes Now a Good Time to Buy
While oil today is well above the historically low prices of January 2016, it is still priced lower than it is historically has been during periods of economic growth. With economists such as Waerness predicting a brighter future for crude prices, there has rarely been a better time for investors to see strong returns on investment in the oil industry over the next several years. Once oil does hit $60 a barrel, investors that entered the market while the price is still below $50 will ready to rake in incredible profits.
Of course, finding the right investment opportunity requires solid investigation and research. Last year new oil projects and oil field discoveries hit record lows. This is another sign that the global oil glut will soon come to an end. It is also a signal to investors that now is the time to find existing projects that are producing, or that will be online in the next year or two.
Factors That Make American Oil an Attractive Long-Term Investment
While the full recovery of oil prices will be a boon to the entire industry, investments in American oil production are particularly attractive for long-term growth and profits.
The United States is in the middle of an energy renaissance. New technologies and techniques are reopening old oil fields. State and federal governments are more supportive of oil production than ever before.
Many oil investments even quality for unique tax treatment. As the political situation continues to destabilize throughout the Middle East, finding safe places to invest in the oil industry becomes more difficult. Over the past five years, the U.S. oil industry has shown a surprising resilience. Even economists like Eirik Waerness were initially surprised by the consistency of the production output by U.S. oil fields.
The time is coming when oil will not only cross the $50 a barrel line, but will continue to climb until it crosses the $60 a barrel price as well. Are you ready to take advantage of this profitable long-term trend?