Jan 16: Quite clearly, the world has abundant supply of oil. And if electric vehicles and global warming push the world to consume less oil, the obvious consequence is that the price of oil should be only marginally more than the last barrel scooped out of the earth by the least cost producer.
8But that is not going to be the case unless the fiscal break-even levels of the biggest oil producers in the world are scaled back to the margin cost of producing oil.
8Until other more viable options to sustain their economies are built, oil producers will continue to look at ways to keep production down and prices up even if they are eventually left with unburnable reserves when demand for fossil fuels run out completely.
8The social cost of producing oil, which is roughly equivalent to the fiscal breakeven level, must be compensated by the price of oil
8Juxtaposed against this is the concept of peak oil. Even though peak oil may come sooner than later, the world will continue to need a large volume of oil and gas to keep powering its economy for a long time to come.
8A combination therefore means that prices can in fact be 'higher for longer" than "lower for longer".
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