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> gas will inevitably drop back down Why is this inevitable? Investment in US tight oil is stagnating, OPEC+ lacks either the desire or capability to increase
by caeril 5y ago
> gas will inevitably drop back down
Why is this inevitable?
Investment in US tight oil is stagnating, OPEC+ lacks either the desire or capability to increase production, Venezuela's production capacity is still terrible, and rumors are getting quite loud that Ghawar has finally peaked.
EV sales are still far less than 50% of total sales, so net global fuel demand will continue to increase in the face of tight supply.
Barring another severe COVID variant outbreak, I don't see fuel prices declining anytime soon.
And the cool thing about energy prices is they feed forward into the cost of literally everything else in future PPI/CPI prints.
- bryanlarsen 5y agoEV sales are over 25% in Europe, over 20% in China, 10% in California. It's far from the majority but remember that price is set at the margin -- supply 99 demand 100 price goes up, supply 101 demand 100 price goes down. But the biggest factor is that the cost of renewable electricity is dropping fast. And to many industries, they are imperfect substites, so the price of electricity and gas are correlated. > And the cool thing about energy prices is they feed forward into the cost of literally everything else in future PPI/CPI prints. Exactly, which is why the forthcoming massive drop in electricity costs has me so excited.