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Tariq Siddiqui's picture
COO Upstream EP Advisors LLC

Oil & Energy | Business Development | Capital Projects | Offshore Wind -  Proven leader in offshore development and operations, with 25+ years’ expertise in managing business through cycles...

  • Member since 2021
  • 109 items added with 59,022 views
  • Oct 25, 2021
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Predicting commodity prices, especially oil & gas at any time is a uncertain undertaking, predicting at long-term, its definitely challenging. There are two Narratives

The Narratives
  1. The dominant paradigm is renewable energy rush will kill off oil demand growth in a few years, a decade at most.
  2. The other is a disparity between emissions ambitions and the capabilities to fulfill these ambitions.
The Demand Crunch - Challenging Peak Oil demand Paradigm
  • Demand, meanwhile, is rising, with the energy crunch seen adding anywhere between 500,000 bpd to 750,000 bpd. 
  • There is a surge in the demand for oil & gas but also coal and not just in the usual place—emerging economies—but in countries such as the United States
  • Some are speculating about $200 Brent and not only talking but betting on it.
  • Under investment in oil & gas has further hurt the supplies
  • Analysts are not simply revising the price  forecast but essentially the peak oil demand scenario supporting Net-zero.
Energy Transition Challenges & Longevity of The Rally

The question is about the demand and the rally in the short and long-term scenario>

  1. Is it Just a short-term rally that has been exaggerated by the post pandemic bounce back or 
  2. There are other signs that the demise of fossil fuels has been greatly exaggerated
Points To Ponder?

There is a much-needed discussion about governments approach to the renewable energy shift -Has it worker? Oil may not reach $200 next year or ever, but it might end up being around and in wide use for longer than many might have hoped and believed.

 

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