U.S. crude futures closed up $.8700 at $81.31 per barrel, while international benchmark Brent crude futures gained 1.24% to trade at $84.21 per barrel on Thursday afternoon in Asia. The oil market is in “the longest deficit we’ve seen in decades,” and demand will continue to outstrip supply in winter, said Courvalin. The lack of upstream investment in oil supply while demand grows points to “sustained high prices” at least in the year ahead, he added.

What’s happening in the coal market — where prices are at record highs because supply shrank faster than demand — is a “warning sign” for oil, Courvalin said. Oil drilling activity hasn’t recovered much on the supply side, while demand is growing, he said, describing the market as being in an “entrenched deficit.” “We’re facing potential multi-year deficits and the risk of significantly higher prices,” he said. There needs to be a realization that the transition to cleaner energy will take a long time, and that calls to stop investing in hydrocarbon supply will only create “much higher energy prices in the coming years,” he said.

Despite oil futures climbing more than 60% this year and hitting multi-year highs, Courvalin said oil producers haven’t increased supply. “Demand is rebounding further and we need to really start to see that investment,” he said. Shale producers, however, are focused on returning cash to shareholders. “That’s the key of the sustainability of higher prices,” he said, adding that he sees oil demand hitting new record highs in 2022 and 2023. “The fundamentals actually very much support the view of higher prices than we’ve seen, pretty much since 2014,” he said.