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Cathie Wooden compares the present crude oil market to whale oil and predicts it can endure the identical destiny

Cathie Wood calls for a drop in oil prices and compares the crude oil market to the extinction of whale oil in the early 20th century.

"The rise in oil prices this year is more a function of supply than demand. At the turn of the 20th century, whale oil shared the same fate and whale oil prices fluctuated dramatically. If @ARKInvest's research is correct, oil prices will suffer same fate as whale oil prices, "Wood said in a tweet on Thursday evening.

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The price of U.S. oil has risen sharply this year as demand rebounds from the decline during the coronavirus pandemic. US crude oil futures West Texas Intermediate (WTI) were trading at around $ 74.38 a barrel on Friday and are well on their way to posting profits for their sixth straight week. The commodity rose more than 53% in 2021. At the beginning of the pandemic, futures were trading at a negative value due to the collapse in demand.

While many analysts and economists see the rise in the price of oil as a function of increased demand, Wood posits that it is due to a disrupted supply. The innovation investor expects oil prices to fall just as they did in the early 20th century when whale oil prices dropped dramatically as other fuel sources replaced it.

Many of the companies that believe Wood most are into technology that bypasses the use of oil. Wood is a bull for electric vehicles and battery-related businesses. Overall, the widely regarded investor believes long-term deflation will return as technology continues to disrupt many industries across the board.

"Still, under ESG mandates, pension funds are calling for oil companies to cut capital spending while US banks refuse to invest loans to fracking companies in response to last year's plunge in oil prices, and OPEC holds the line on supplies." Wood tweeted.

Meanwhile, OPEC said earlier this week that it believes oil demand will continue to rise through 2035, even with cleaner energy sources, as developing countries increase fuel consumption. OPEC then expects a demand plateau.

– With reports from CNBC's Pippa Stevens.

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