Running bulls are calling for another era of US$100-plus oil. The last time we saw that number flicker on a quote screen was July 2014. Today’s market feels more like circa 2007. Robust oil and gas consumption tugs against reluctant production and geopolitical tensions — think Russia, Ukraine, Middle East — act as a dark, phantom force to the upside.
The here-and-now price of a barrel has topped US$80 (WTI), which is a milestone. Any price that starts with an eight goes beyond psychological curiosity — fiscal consequences ensue outside the US$50-to-US$70 comfort zone.
Over the past decade, we’ve seen a huge build out in renewable energy sources and great progress in pushing electric vehicles (EVs) off assembly lines. Yet despite the forces of substitution, divestment and the persistent pandemic, 100 million barrels of oil are still flowing through the veins of the global economy.
Worldwide oil consumption will peak and roll over. But many acknowledge that day is still several years away. Meaningful decline is unlikely until the 2030s. Not all oil is equal, there are many grades produced in the world.