Energy Report: The Ride

The petroleum uptrend continues because of vigorous Chinese refining activity and a realization that weak oil demand will not last forever. The "Peak Demand" hysteria making the rounds and climate change fears have oil companies making rash decisions that we will pay for down the road. Reports that Shell employees were quitting over the speed of green energy directives show that Shell's leaders still have common sense. 

Underinvestment in traditional forms of energy wipes off millions of barrels a day of future oil production, pointing to a decade of rising oil prices. That will only worsen under a Joe Biden Administration that will regulate fossil fuels to the point that it will not allow US production to recover to post-pandemic levels. While in the short term, COVID pandemic shutdown and weak demand may mask the longer-term looming supply deficit, in the long run, it looks like the supply deficit "die has been cast." 

Pump Jack, Oilfield, Oil, Fuel, Industry, Petroleum

Image Source: Pixabay

In the meantime, OPEC Plus is trying to figure out how to deal with more shutdowns and more Libyan oil supply. Reports say that OPEC moved up its JMMC meeting to December 16 instead of December 17. The trades will look at OPEC Plus production to see how quickly they implement their 500,000 barrel production increase and see the net effect versus better compliance by cheaters and improving global demand.

 Crude oil shorts are covering. Even the drama over a stalled stimulus package in Washington and an antitrust crackdown on Facebook has not shaken the bull's confidence.

The FT reported that several clean energy executives' departure had hit royal Dutch Shell amid a split over how far and fast the oil giant should shift towards greener fuels. The wave of resignations comes just weeks before Shell is set to announce its energy transition strategy. According to four people familiar with the matter, some executives have pushed for a more aggressive shift from oil, but top management is more inclined to stick closer to the company's current path.   

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