Why current oil prices are unsustainable

Chad Padowitz from Wingate Asset Management, says energy is one of the two real opportunities in markets right now. “We don’t believe oil is sustainable at $45-$50 a barrel. We think a sustainable level is around $70 to $80, that is the price you need to get supply to meet current demand.” Padowitz points to three factors that influence his thesis: 1) Approximately 8% of global supply needs to be replaced each year to sustain current production levels (i.e. not reliant on economic growth) 2) The impacts of the dramatic fall in rigs used to extract oil takes about 6...

Chad Padowitz from Wingate Asset Management, says energy is one of the two real opportunities in markets right now. “We don’t believe oil is sustainable at $45-$50 a barrel. We think a sustainable level is around $70 to $80, that is the price you need to get supply to meet current demand.”

Padowitz points to three factors that influence his thesis:

1) Approximately 8% of global supply needs to be replaced each year to sustain current production levels (i.e. not reliant on economic growth)

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