Several months ago, I discussed the issue of “Capex compression.” When decreasing oil industry revenues cannot keep up with the increasing exploration and production costs of unconventional resources such as deep-water and shale fields, investments decline. Not exactly rocket science…. GETTING LESS = HAVING LESS As I noted in that post, and as common sense suggests, when they invest less, we wind up with less. We now live in a world where demand is forecasted to increase [see this ] and conventional crude oil production continues to decline by 3-4 million barrels per day—depending on which source is referenced. Lower investments and thus lower supply from resources harder to find, extract, and produce to begin with, means that we’re confronted with some legitimate supply and demand issues most fifth-graders would understand: Less supply and higher demand = a problem. Of course, prices at the pump could increase […]