Tundra's Market Analysts Take Great Confidence in the Forecast Price of Oil

WINNIPEG, Manitoba - June 28, 2018 - PRLog -- Like any commodity the price is dictated by simple supply/demand economics and with increasing concerns over supply with Venezuela coming offline in the near future these types of factors bode well for the inflation in the price of oil and our standing within the industry.

The Impact of OPEC

OPEC recently announced an increase in production of a million barrels, however some producers are not going to be able to meet that quota, the reality is closer to 600,000 to 700,000 barrels a day of increased output and this is going to fall short of what is required to balance the market.

Now this should be of no surprise to those that follow the oil markets, with Saudi Aramco still planning its IPO they would like the price of oil to remain elevated. It is also general consensus that this has been done to keep the Trump administration happy by keeping the price of oil up and not flooding the market again. As it stands a number of factors (Some of which I have touched on above) will greatly benefit by keeping the price of oil steady and not causing anything that will rock the boat and cause the price to crash again.

Venezuela

The industry has been witnessing the on-going declines in Venezuela's production figures. For those of you that are not in the know Venezuela has the largest known oil reserves in the world on paper however at this current rate of decline (circa 1 million barrels a day) it will take to the first quarter of next year at the latest for the country not to have any oil to export.

Aside from Venezuela there are other producers whose ability to produce oil has been curtailed by the circumstances in which they currently find themselves, more specifically and in this case Iran.

Take these players away then there are not a lot of major players left in the mix. This leaves Russia, the United States and Saudi Arabia being capable of meeting production increases.

A Decline in Demand

With the well-publicised global shift from fossil fuels to green energies in the offing you would not be mistaken to believe the hype that oil and gas will become a thing of the past. This is incorrect; a decline in demand in the foreseeable future is not really on the cards. As an example a polar shift to Electric Vehicles (EV's) is still way off from taking a significant global market share.

The fact is even though we have seen an order of magnitude increase in EV's on the road, oil demand has increased regardless and the IEA (International Energy Agency) has forecast an additional 1.4 million barrel a day increase in demand through to end of 2019.

Tundra

The team at Tundra take great confidence in the fact that oil companies will still have to find and produce this oil, and as the larger players are being punished for making long-term investments, the fact remains even with the likes of ourselves in this this mix a shortfall in supply is likely and this will drive the price of oil back to $100 and above.

It is not as easy as turning the taps on overnight and as the price of oil starts to rise, companies panic and start making the required investment. Due to nature of oil exploration and production this type of response comes with a multiyear lag and it is this lag that in our opinion will lead to a sustained oil price spike for anywhere from 3 to 5 years. This is great news and testament to those that have advised us to stick to our guns regarding or imminent listing.

Unlike a number of our peers Tundra Oil and Exploration are poised to meet demand immediately and with the capital that our imminent listing will provide. It is promising times for the company and those that are invested.

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