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But a key part of this is simply how much Russia and Saudi Arabia want to pump. The whole purpose of the price war was to drive high cost producers out of busin

But a key part of this is simply how much Russia and Saudi Arabia want to pump. The whole purpose of the price war was to drive high cost producers out of business, but that combined with the severe drop in demand sent the price to oblivion. Also, this could catalyze a shift to people doing more things remotely. But will that reduce oil consumption significantly? Don't forget about induced demand. Right now, I can head down the freeway in what used to be rush hour without any traffic. If that persists for any length of time, people will start buy McMansions on former farmland until the freeways get packed back up again. They will perhaps order their products that will be produced with petroleum in China, and shipped on container ships, and trucked to Amazon facilities, and then delivered in gas-burning vans. I think as long as the economy keeps growing oil consumption will keep growing, until something cheaper than oil comes along (either through technological breakthrough or subsidy).

nopinsight 7y ago
Low traffic won't persist long-term, so most people with a job in a city will not move, unless they and their partner both get stable remote jobs. Increased use for transporting goods is plausible, but generally it is more efficient than transporting people. For most products, lower oil price might not contribute much to lowering its manufacturing cost, only for logistics, so it's unclear how much induced demand will apply to finished goods. Transportation accounts for 69% of US petroleum consumption. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc... Energy use (from all sources) per unit of GDP has slowly declined over the years.
- hermitdev 7y ago
  Not to mention people that can't relocate. I, for one, cannot relocate on account of proximity to my step children (whom I've not seen for months due to quarantine). I'd be perfectly happy to work remotely from a site in Montana, given I had decent internet. But, because of my step children, I can't for at least another 7 years. Until all of my step kids are in college, at least, I'm stuck being in the Chicago area (otherwise, my wife would divorce me if she couldn't see her kids).

nopinsight 7y ago

Low traffic won't persist long-term, so most people with a job in a city will not move, unless they and their partner both get stable remote jobs. Increased use for transporting goods is plausible, but generally it is more efficient than transporting people. For most products, lower oil price might not contribute much to lowering its manufacturing cost, only for logistics, so it's unclear how much induced demand will apply to finished goods. Transportation accounts for 69% of US petroleum consumption. https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php https://www.eia.gov/energyexplained/oil-and-petroleum-produc... Energy use (from all sources) per unit of GDP has slowly declined over the years.

hermitdev 7y ago
Not to mention people that can't relocate. I, for one, cannot relocate on account of proximity to my step children (whom I've not seen for months due to quarantine). I'd be perfectly happy to work remotely from a site in Montana, given I had decent internet. But, because of my step children, I can't for at least another 7 years. Until all of my step kids are in college, at least, I'm stuck being in the Chicago area (otherwise, my wife would divorce me if she couldn't see her kids).