- Oct 25, 2021 3:14 pm GMT
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 dominant paradigm is renewable energy rush will kill off oil demand growth in a few years, a decade at most.
- 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>
- Is it Just a short-term rally that has been exaggerated by the post pandemic bounce back or
- 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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