Oil Prices May Plummet to $30-$35 Per Barrel: ARK Invest
Cathie Wood's ARK Invest predicts oil prices could drop to $30-$35 per barrel in the future, citing falling demand and increasing production. The firm points to recent International Energy Agency (IEA) projections showing a 5.7 million barrels per day drop in global production and a 2.5 million barrels per day decrease in global demand.
The Strait of Hormuz crisis has caused oil prices to spike, but ARK Invest believes this will be short-lived once the situation is resolved. The firm notes that countries like the UAE are already transitioning away from oil, with natural gas and nuclear power gaining traction.
In fact, the UAE boosted production by 78% in June, muting the price impact of the crisis. ARK Invest suggests that oil reserve values may have peaked at $145 per barrel in 2008, and that prices could drop precipitously once peace breaks out and the Strait of Hormuz opens.
The firm also notes that transportation is transitioning to the power grid, with electric vehicles becoming increasingly popular. As a result, ARK Invest believes oil demand will continue to decline, leading to lower prices in the future.