Recently we came across a great article from an industry veteran of 20 years, in which he goes over his experience with — and views on — the cyclical nature of the oil industry. John Kemp, a journalist and senior market analyst specializing in oil markets, has been on the wild oil ride from $10 a barrel to $140 a barrel, and back to where we sit today.
As Kemp states, “In the late 1990s, we spent a lot of time talking about a world in which oil would never be scarce and expensive again. In the 2000s, there was renewed talk about peaking oil supplies and prices continuing to rise. Now we are back to talking about a glut and whether oil prices will ever recover.
In my working life, I have lived through one complete oil industry cycle, from bust to boom and back again. If I am lucky enough to be working in this sector for another 20-25 years, I will probably witness at least one more complete cycle of boom and bust.”
“The point is that the oil industry is inherently cyclical. Volatility is not just an incidental part of the oil industry. It is the industry’s defining characteristic.”
Check the full article out here: http://www.investorvillage.com/groups.asp?mb=19168&mn=16338&pt=msg&mid=15814373