As oil rises higher and higher, many people are pointing to the issue that a bubble is created. Is there really a bubble? Or is oil high price a reflection of its tight supply?

In my view, high oil price is just a reflection of its tight supply. And there are 4 main factors pointing that oil price is going to move higher:

1) Growth in Emerging Economies –> Rising Oil Consumption –> Higher oil price

2) OPEC –> Government depend on oil income –> Cartel restricts supply –> Higher Oil price

3) Geopolitical Issues –> Cause disruption / thread of oil production –> Lower global spare capacity –> Higher Oil price

4) Peak Oil Theory –> Declining Oil production –> Less Supply –> Higher oil price

I believe oil price is going maintain its uptrend in the mid-term. I’m predicting oil price to reach $250 in 2 years’ time.