oil daily chart

Oil is at session lows at the moment, down $1.40 to $91.51

Goldman Sachs is warning it could rise to $125 and that risks remain to the upside. In a note today,

"In our view, until the uncertainty around the rapidly escalating situation is resolved, commodity price risk remains skewed to the upside, with further escalation likely to send European natural gas, wheat, corn and oil prices higher from already-elevated levels. Crucially, we see a clear risk of $125/bbl in crude should the global market need to balance by summer 2022, as opposed to our current summer 2023 base case, in the face of these supply concerns, as we believe oil demand destruction would be required around the world to drive the faster rebalancing in global oil markets," wrote Goldman's Jeff Currie said in a new research note.

The market is seeing less of a risk of Russian oil being cutoff because of softer sanctions but in the longer term, Currie highlights the looming problem.

"While the range of near-term price outcomes is wide, our longer-term, bullish underinvestment thesis is very much intact and reinforced by these events," Currie wrote.

On that note, fracking contractor Trican Well was out with its earnings and conference call yesterday and they highlight what's happening on the ground.

CEO Brad Fedora indicated that companies are growing more inclined towards drilling, at least for short-cycle projects but that they were in no hurry to expand offerings, despite idled equipment.

"Because labor is so tight, we will continue to see labor availability as a very significant bottleneck in crew additions, whether it's in the fracturing industry or the drilling industry. And so, I think the industry overall will be sort of operating at its max capacity from a people perspective. And whether there is discipline or not, it probably won't matter, because people just won't be able to add equipment like they used to. It just takes so much time now to get additional people. And I think we've communicated this many times before, but we did add Crew 7 in our fracturing division. It took over 6 months to get the people to add that crew, and so we don't expect that's going to change going forward."

So whether it's $125 now or later -- Iran discussions will play a role in that -- the theme of underinvestment isn't going away, even with oil above $90. That sets up for high long-term prices and all the inflation that seeds throughout the system.