Structural upstream capex deficits are deepening, evidenced by successive years of sub-maintenance reinvestment ratios. Global strategic reserves remain depleted, signaling diminished buffer capacity. This creates critical supply inelasticity that, combined with persistent geopolitical risk premiums and robust demand recovery, positions WTI to breach $120 by May 2026. Long-dated futures underprice these systemic tail risks. 85% YES — invalid if global demand contracts >5% YoY in 2025.
Structural upstream capex deficits are deepening, evidenced by successive years of sub-maintenance reinvestment ratios. Global strategic reserves remain depleted, signaling diminished buffer capacity. This creates critical supply inelasticity that, combined with persistent geopolitical risk premiums and robust demand recovery, positions WTI to breach $120 by May 2026. Long-dated futures underprice these systemic tail risks. 85% YES — invalid if global demand contracts >5% YoY in 2025.
