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Oil & Gas will be around for decades
https://www.msn.com/en-gb/video/news/oil-and-gas-will-continue-for-decades/vi-AAPV5Tm?ocid=msedgdhp&pc=U531
"with very positive implications for the oil price"
Handy for anyone whose been investing heavily in real oil producers over the past eighteen months or so.
:'D
Many thanks for your thoughtful post, ZYX098, with which I am in almost full agreement.
It is this quotation from my post of 13:27 yesterday which is, I believe, spot on:
“We are running at net-zero type capex levels, whilst at the same time demand is not following the net-zero trajectory,” said Martijn Rats, an oil strategist at the bank (Morgan Stanley). “Demand will be above 100 million barrels a day for the rest of the 2020s, but on the supply side we’re not going to produce that with current investment levels.”
Environmental considerations are killing off investment in oil ... with very positive implications for the oil price.
Hi Ocelot,
I don't know.
It is a distinct possibility, as US Shale is not coming back and other sources generally take 2 - 4 years to start ramping up, of which there isn't much sign yet.
The real problem with high oil prices is it tends to push the world economy into recession - this is why in the past there has usually been a boom & bust cycle as far as oil goes in that a supply glut pushes the price down, the world economy expands due to cheap energy, thus driving up demand for oil, which increases the oil price and so on.
With recovery weak due to Covid and logistics issues (i.e. shipping, which it is thought will take another 9 - 12 months to get sorted out), high energy costs may be enough to stop any recovery dead in it's tracks - which will obviously not be good for any number of reasons.
Anyway, a bit simplistic, but you get the drift.
The true cost of renewable energy is only just beginning to be recognised (never mind the shortage of key materials to make it happen), so as the developing world expands, they are going to need more energy and that will not come from renewables.
It will have to come from coal, oil or gas.
Coal is really only acceptable in conjunction with CCUS technology, which apparently is still in the early stages of development w.r.t. coal fired power stations (it also is expensive and takes c. 15% of the energy output of the power station to run), so that leaves oil or gas - of which, as we have seen, there is not quite enough to go around at the moment.
As far as I know, it didn't get mentioned in the main press but OPEC actually didn't meet their own quota last month - they fell about 750k BOPD short.
Don't forget that in a lot of developing Countries power is provided by banks of generators, rather than 'conventional' power stations. In many cases they are dual fuel (can use Gas or diesel) and that is why - unusually - the high gas price has had a knock on effect on the oil price as it is now cheaper for them to run on diesel.
So there are more than a few reasons why the oil price could remain high for at least a couple of years, plus one big reason why it might drop.
My personal feeling is that we will see $100/bbl oil in the next six weeks or so, and that it will last until perhaps Feb next year.
If one of Europe, Asia or North America has a colder than normal Winter, then gas (and therefore oil) prices will remain high until Q3 next year.
If two of them have a cold Winter, I think all bets are off on what the oil & gas prices will do and how long for - while OPEC and Russia will be laughing all the way to the bank.
If all three of them have a cold Winter.... I really don't want to think about the effects of that.....
StopStart
New
By an old mustang and look after it for a lifetime. Yes enjoy
Don't forget solar... fks do you live in the UK?
Cop meeting is a show for the media. Whatever is pledged to so called clean up the air.. will only encourage other countries to produce more of it and the silly thing is those clean countries will import it..
Whoops!
One of the most significant outcomes of next week’s COP26 climate summit may be a pledge by dozens of countries to cut emissions of methane, the superpotent greenhouse gas. That will require the U.K. hosts to do some major cleaning up at home.
Britain is the source of some of Europe’s worst methane emissions, according to the nonprofit Clean Air Task Force... (from Bloomberg)
"wrighting"? Hah! Adrian confirmed! In the bin.
Oh dear.
Goodness me, Adrian, you're having to try hard to get your troll tummy fed this morning!
Stopstart
You forget to mention the transition with no new petrol of diesel cars produced after 2030 which may have life on the road for 15+ years.
The materials that are needed to produce all these new vehicles and charging points are also predominantly oil based meaning that unless new production materials are produced oil will be in strong demand well into the next century at ever increasing prices due to restricted new exploration, development and production.
It looks as if we will be back to the 1970 with power cuts and short time working as there wont be enough power generation available as only 20% of UK power is generated by nuclear power generation in the UK.
Not if people keep gluing themselves to it...
What is producing the electricity now there is no wind to drive the wind turbines.
Oil / gas or coal?
Just to confirm your last post, ZYX098:
Could the era of cheap oil supply be gone for good?
That’s the conclusion of some of the biggest commodities desks on Wall Street, where banks have been lifting their long-term price forecasts, often by $10 or more.
While the U.S. shale boom brought about a “lower-for-longer” mantra, the market is now fixated on climate change and the dwindling appetite to invest in fossil fuels. Instead of growing supply, companies are under pressure to limit their spending, causing a structural under-investment in new production that -- the argument goes -- will keep oil prices higher for longer.
“My advice to clients is that you want to stay long oil until you know where that equilibrium price is” that brings new supplies online, said Jeff Currie, head of commodities research at Goldman Sachs Group Inc. “We know it’s above these levels because we haven’t had a big uptick in capex and investment.” ...
“We are running at net-zero type capex levels, whilst at the same time demand is not following the net-zero trajectory,” said Martijn Rats, an oil strategist at the bank (Morgan Stanley). “Demand will be above 100 million barrels a day for the rest of the 2020s, but on the supply side we’re not going to produce that with current investment levels.”
https://www.bloomberg.com/news/articles/2021-10-23/wall-street-hails-a-new-era-of-oil-prices-higher-for-longer?sref=Em01M8Hr
All credible forecasts show that peak oil will not occur until the mid 2030's, and any decline will be vey slow and spread out over several decades.
HM Govt's own predictions for the UK out to 2035 show gas demand to be flat and oil consumption to drop by less than 10%.
It's only the eco-warriors who mistakenly think that if we all switch to EV's, all will be well with the World and oil consumption will fall off a cliff.
And if you doubt that, look at the reaction of the West to the current oil price increase - they have collectively gone on bended knee to OPEC and Russia (both paragons of virtue...) to increase production.
The world will be using the same amount of fossil fuels for decades yet.
Forget it , by the time the appeal and and challenge to the appeal has been heard the world will be using much less oil which sill strengthen the argument to refuse it anyway. . This is a sad share I stick with them faithfully not believing it could be that bad for a company that has been pumping oil for more than a year now