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Good thoughtful piece here, and to my eyes, factually accurate.
As I’ve posted here, China’s oil demand may be peaking right now, some years earlier than predictions of not long ago. Additionally, China’s exports of affordable, very capable EVs are destroying demand in the developing world. US producers, while robust in recent years, rely, according to this, on a relatively high price for oil, which may not be sustainable in light of mounting oil surpluses globally.
The Wall Street Journal recently reported that the oil tycoons who supported Donald Trump’s campaign were not thinking of a “Drill Baby Drill” future. They know that raising production will crash prices, profits, and their stock holdings. The game, according to the Journal, is “shoring up demand for their products—not pumping more fossil fuels, which they have little incentive to do.” The MAGA faithful, who were told gas prices would drop in half on day one, will be disappointed in the short term. In the longer term, gas prices may come down as global, but may bring a lot of American Industry and jobs down with them.
Video Description:
The cost to produce a barrel of oil is far higher in North America and Europe, than across oil-producing countries in the Middle East, and Russia. And for oil producers in the United States to make profits on new wells, oil prices need to average over $70 per barrel for the lifetime of the well.
Global oil demand, however, is now falling, and oil producers are pumping a million barrels of surplus oil, every single day, at current prices. Oil analysts expect oil prices to fall well below $70 a barrel over the next two years.
Driving prices lower is collapsing oil demand from China. Households in China prefer electric vehicles to gasoline-fueled cars, and Chinese carmakers export EV’s to dozens of countries, wrecking oil demand across the world.
The new BRICS bloc will be supplied by friendly sources in Russia, the Middle East, and Africa, where producers can still make profits at ever-lower price points compared to companies in North America or Europe.
