The thinking I guess is that investors are pouring money into renewable energy generation and keeping oil production low. This would keep supply low during current and/or rising demand which will keep the price of oil elevated for the time being. I don’t think anyone can really tell what will happen over the next year as we crawl out of a post-pandemic economy.

U.S. crude hit $71.48 a barrel Monday, its highest level in more than 2½ years, and has roughly doubled since the end of October. Some traders are using options, which allow the holder to buy or sell an asset at a specific price in the future, to wager on prices hitting $100 by the end of next year. 

Even after OPEC and its allies lift output in the months ahead, some analysts think production will struggle to catch up to demand, which the International Energy Agency projects will rise at least through 2026. Spending on oil extraction fell last year to about $330 billion, less than half the total from its 2014 record, according to research firm Wood Mackenzie. That figure is expected to rise just modestly this year and in the years ahead.

Wall Street Journal

Image by Nicola Giordano from Pixabay