Peak Oil reality or Myth, of an out of Control System Message Board

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Politics : Peak Oil reality or Myth, of an out of Control System

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To: dvdw© who wrote (1538)	7/14/2022 9:26:52 AM
From: robert b furman	Read Replies (1) of 1580

Hi DVDW, Always good to see you posting. Crude has dropped 30% after the Ukraine war has proven that Russia's oil is being sold to bargain hunters who need and like it cheaper. Yet the entire crude complex is showing demand exceeds supply, as we find spare capacity does not exist in size. Couple that with chronic inventory declines vs. 5 year averages. The pandemic's demand destruction hid the double whammy of the depletion aspect of crude's ESG restricted reinvestment. Couple that with the hype we were barraged with about the ICE becoming obsolete by 2030! Realizing every recession in my life was preceded by an energy spike - the result of OPEC having pricing power. They once enjoy that again! I'm leery of thinking that new infantile demand destruction in crude will lead to a decline in oil this soon. We have not yet surpassed the previous high of crude @ $147 - let a lone adjusted for inflation. A decade of reduced investment and Capex reductions is the problem for all on this planet. Global demand for crude is always underestimated, especially when the growing populations of emerging markets are chronically overlooked. India's buying of any and all discounted Russian crude shows this, ditto China. I do agree with your premise, but I think it is much farther down the road in time. Before that hits, we'll see ATH's in crude. When the bloom comes off all the renewable energy hype and EV's are found to be pipedreams and huge write downs are made by the OEM's, we'll then see the peak in crudes demand (along with it's inelasticity of demand). EV's are urban niche products. EV's so far in the US, are luxury items for those who do not use vehicles for trips across large rural geographies or cross country travel. It does work better in small countries, Norway, UK, and smaller Euroland countries and large urban populations everywhere. Being below the nominal interest rate and raising rates is early in the game of pain that comes to us. We will have turned the corner to this energy obfuscation when we all get serious about embracing nuclear electricity generation in all of its many forms. Until then OPEC is going to do what it has historically always done, over priced crude till it chokes us into recession. That has historically required an increase by a multiple (3 to 10 times). IMHO Bob

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