The oil squeeze has just begun

Think the market is already tight? It’s going to get tighter over the next five years under pressure from both the supply and demand ends. Here’s why.

“World will face oil crunch in five years.”

That’s not exactly the kind of headline you want to read when crude oil is already at $73 a barrel. When things are this bad — crude prices are up 12% in the past two months as of July 12 — you don’t want to hear that they’re going to get worse.


Yet that’s exactly what consumers — and investors — should expect, the International Energy Agency said in its latest Medium-Term Oil Market Report, issued July 9. The market for oil will get even tighter over the next five years. (And in case you’re looking for a way out, natural-gas markets may be even tighter.)

As much as I’d like to believe that the agency has made a mistake, the logic behind its pessimistic assessment of supply and demand is impeccable.

MSN