Chart of the Week - Crude Oil Capex Collapse

Chart of the Week - Crude Oil Capex Collapse

Crude Oil Supply Tailwinds: Crude oil has been quietly achieving, and I would say overall the path of least resistance is still higher for crude in the coming months and quarters. One key reason is the substantial supply tailwinds already baked-in.


First it was the commodity crunch of 2014-16 that sunk commodity related capex, and then a second wave of commodity crashes in 2020 (need I remind you of the brief foray into negative prices for WTI crude?!) where the pandemic also caused tremendous and varied disruption to commodity investment.


Add to that steady shifts in investor preferences and social/political attitudes — i.e. the rise of ESG investing and the quest for carbon zero. Basically this has starved the oil & gas sector of funding, and essentially engineered a new bull market in energy.


All that’s left now is for reopening and post-pandemic normalization to drive a more fulsome recovery on the demand side and crude could easily top $100/bbl.


Clearly this is interesting in its own right and with regards to energy sector equities, but is also meaningful for the inflation picture (and potentially also the growth outlook).

chart of oil price and capex collapse - oil upside bull case $100 barrell

Key point: Crude oil likely sees further upside on the back of major underinvestment.


NOTE: this post first appeared on our NEW Substack:


Best regards,


Callum Thomas


Head of Research and Founder of Topdown Charts




Follow us on:





Chart of the Week - Crude Oil Capex Collapse

Callum Thomas

Head of Research

Callum is the founder and managing shareholder of Topdown Charts. His career background is in multi-asset investment management in New Zealand and Australia, with a focus on investment strategy and economics.  

Callum has a passion for global economics and asset allocation strategy and has developed strong research and analytical expertise across economies and asset classes.  Callum's approach is to deploy a blend of factors to build out a holistic picture and raise conviction. This includes valuations, monetary conditions, cyclical indicators, sentiment, and technicals.  Callum believes innovation is vital to maintaining an edge through investment research and is on a constant mission to uncover and develop new datasets, indicators, and new ways of looking at the world to drive sensible and profitable decision making by portfolio managers.