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The Intrinsic Value of Crude: An Underestimated Commodity

Crude oil prices are ridiculously cheap when compared to the cost of other commodities and equities. For the industry to survive and provide the world with its most important commodity, the price of crude oil must increase dramatically in the near future to break out of the lower tercile historical range it has been caught in since the start of 2020. Another two years of “lower for longer” can only exist if other asset bases devalue themselves to close the gap between crude. A more likely scenario is the positive feedback loop of reduced investment and tightening supply will cause a violent movement upwards for the intrinsic value of oil.