Oil: From Uninvestible to Must Own

From Goehring & Rozencwajg

There are notable similarities between the uranium market twelve months ago and today’s oil market. Almost overnight, uranium went from uninvestible to must own, and we believe oil is about to do the same. Uranium slipped into structural deficit for the first time in its history; however, a temporary secondary supply source obscured the shortage. Crude oil, too, has fallen into a structural deficit for the first time ever. Throughout the two oil crises of the 1970s, OPEC maintained ample spare capacity. Similarly, during the bull market from 1999 to 2008, the market was temporarily tight but never in structural deficit.