If you look at the numbers today in the world market oilhe will conclude that they clearly favor consumers in relation to producers.
The International Energy Organization (IEA) estimates that oil supply will exceed the demand of about 1 million barrels per day this year. Thus, the dominant narrative says that the market is well equipped and the low prices we see in Brent and WTi are justified.
But behind this beautiful showcase there are some factors that threaten to change things dramatically in the coming years.
In the production of production, the industry has been suffering from a subtle investment for several years. This week the United Arab Emirates Energy Minister pointed out this week, stressing that the more the new productive capacity is neglected, the greater the narrowness in the future.
“The reality today is that we are losing productive capacity, which falls every year … Some states cannot produce as long as last year or even last month,” Souhail al-Mazroi said.
The production of the US, which has increased dramatically due to the revolution of shale oil over the last 15 years, has also played a crucial role. In this case, experts are increasing that we are now very close to its climax and then start a long decline that will have very great consequences.
It is indicative that from 2010 until today, nine of the ten new barrels that have entered the world market came from US shale deposits, as Goehring & Rozencwajg observes.
All this while demand continues to grow at a significant pace every year. G&R estimates that if there is a accounting error in the measurement of the demand that the IEA has committed and is required to correct, then this year will be reinforced by 2 million barrels/day, that is, very strongly. By extension, there is no large surplus estimated by the IEA, but a tighter balance.
In increased demand, the relaxation of green policies in the wake of the energy crisis, which is now clear in the US, but even in Europe, helps in the increased demand.
On the basis of the above, reflections on the future of oil and prices that consumers will be required to pay. The difference in the past is that this time there does not seem to be a great technological innovation that will bring huge new quantities, such as offshore mining and shale.
These reflections do not yet have been discounted on oil or oil stock prices. Considering inflation, then today’s barrel values are historically historically with the exception of instant “dives” as in the era of pandemic.