Oil prices could double and surge past all-time highs of around $150 a barrel with a possible supply crunch on the horizon, analysts at Bernstein Research warned.
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Energy producers had pulled back on spending during a period of weak crude prices, shunning large exploration projects. Only 15 companies are now responsible for 80% of global oil reserves, according to a Bernstein research note cited by CNBC. By cutting investments, the industry risks creating a shortage of oil in the long run, Bernstein said.
“Any shortfall in supply will result in a super-spike in prices, potentially much larger than the [$150-a-barrel] spike witnessed in 2008,” the analysts wrote in a note to clients Friday.
Oil companies currently hold enough reserves to last 10 years. By comparison, the industry had 15 years of reserves in 2000.
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“At some point the proverbial ‘chickens will come home to roost,’” Bernstein said, according to CNBC. “The impact will be production declines and another super-cycle in oil prices.”
U.S. crude spiked to a record of about $147 a barrel in July 2008. Prices settled at $73.80 a barrel on Friday.
