BofA’s Blanch Says Oil Market Has an Under-Investment Problem

The video discusses the impact of price elasticity on hydrocarbons, forecasting oil prices to reach $100 by next year due to tightening supply and demand conditions. It highlights challenges in energy investment, particularly in the transition to a green economy, and the impact of energy policies on renewable sources. The discussion also covers the dynamics of oil prices, the role of air travel in demand, and the potential influence of COP 26 on future investments.

What is the typical price movement for a 1% unexpected change in oil supply or demand?

• $40

• $10

• $20

• $30

What is driving the forecast of $100 crude oil by the middle of next year?

• Increasing supply

• Stable market conditions

• Tightening supply-demand conditions

• Decreasing demand

What is a major concern regarding the transition to a green economy?

• Rapid technological advancements

• Excessive use of coal

• Underinvestment in traditional energy sources

• Overinvestment in renewable energy

What could potentially lead to a multi-year problem in the energy market?

• Quick transition to renewable energy

• Immediate investment in oil

• Stable weather conditions

• Reluctance to invest until higher prices

What is a significant factor in the potential rise of oil prices to triple digits?

• Resumption of global air travel

• Decrease in electric vehicle usage

• Stable natural gas prices

• Increase in coal usage

What event is expected to provide guidance on resolving the energy market problem?

• OPEC Meeting

• COP 26

• World Economic Forum

• UN Climate Summit

What is a potential consequence of using fiscal and monetary tools to address the current undersupply problem?

• Immediate resolution

• Entrenched inflation

• Stable oil prices

• Decreased inflation