The bullish camp, which includes Opec and EIA, has recently reinforced their $80/bbl target by 2020 based mainly on “battle for supply” (competition among oil producing nations and technologies) arguing that low prices will result in postponed or cancelled investments and permanent loss of production capacity, which combined with their optimistic outlook for oil demand, would allow the cartel to regain control and sustain high prices.
The bearish camp believes in “lower for longer”, below the current spot, and much lower than the $50/bbl currently implied by the 2020 futures. The bearish view acknowledges the “battle for supply”, not only for crude oil but also for natural gas, as well as the “battle for demand” (competition among fuels) where refined oil products (such as gasoline, diesel or jet fuel) compete for market share in transportation demand with alternative energy sources and technologies (such as natural gas, renewables, electricity or batteries); a dramatic change that would erode the cartel’s oligopolistic power.