Crude oil prices have been on the rise ever since the Russo-Ukrainian crisis unfolded amid fears of supply shortages. Late Sunday, the WTI oil futures touched an intraday peak of $130.333, the highest since mid-2008.
As the price of oil soars, money manager and Ark Invest founder Cathie Wood took to Twitter to clarify the $10 price prediction she issued for oil in July 2020.
What Happened: Quoting her 2020 tweet, Wood said oil demand probably hit a secular peak in 2019. She blamed the recent spike on supply shock resulting from energy insecurity policies of the current U.S. administration, ESG mandates the world over and more recently the Ukrainian crisis. The money manager said prices have rallied to the point that would stimulate demand destruction. Two years back, Wood had predicted that oil would drop back to $12 level, where it was in the aftermath of the 1973 oil cartel crisis. This time around, the slide in prices will be precipitated by electric vehicles, she had said. Wood now conceded that she "got the supply shock wrong." She still feels an accelerated transition toward electric transportation will destroy oil consumption at the margin.
The Ark Invest founder chose to be a little cautious.
"That said, the accelerated shift toward electric transportation will destroy oil consumption at the margin. Long term, though longer term than I expected, oil prices will collapse under the weight of lower demand," Wood said.
I got the supply shock wrong. That said, the accelerated shift toward electric transportation will destroy oil consumption at the margin. Long term, though longer term than I expected, oil prices will collapse under the weight of lower demand. Innovation solves problems!
— Cathie Wood (@CathieDWood) March 7, 2022
Related Link: Where Will Bitcoin Be In 5 Years? Why Cathie Wood's Ark Invest Predicts Massive Growth And Adoption
Why It's Important: Wood is a staunch backer of EV giant Tesla, Inc. (NASDAQ:TSLA) and innovations per se, in the field of EVs, robotics, energy storage, AI, blockchain technology and DNA sequencing.
Tesla has a 9.77% weighting in Ark Invest's flagship ETF the ARK Innovation ETF (NYSE:ARKK), 10.68% weighting in the ARK Autonomous Technology & Robotics ETF (BAT: ARKQ) and 8.99% weighting in the ARK Next Generation Internet ETF (NYSE:ARKW).
Tesla CEO Elon Musk said over the weekend there is an urgent need to quickly increase oil and gas production.
Sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports, he added. EVs are capable of impacting oil demand in the long run, with the sector expected to displace 21 million barrels of oil per day by 2050, Oil Price.com reported, citing Bloomberg New Energy Finance.
At last check, the United States Oil Fund, LP (NYSE:USO) was trading 3.55% higher at $82.28.
Related Link: A Peek Into The Markets: US Stock Futures Tumble; Crude Oil Jumps Over 7%
