Energy Report: Toppy And Floppy

The UAE isn’t worried about a sudden drop in demand and expects to have buyers for its crude for decades. However, people familiar with the new tactic say the country wants to pump and sell as much as it can now when demand and prices are strong. Proceeds will help it wean its economy off oil. “Market share is a key factor here,” said a senior U.A.E. oil executive. “We want a bigger market share, to monetize as much as we can from our reserves, especially when we have spent billions developing them. Spokespersons for the U.A.E.’s energy ministry and the Abu Dhabi government didn’t reply to requests for comment according to the Wall Street Journal.

So my take is that now some of the biggest oil-producing countries are buying into the peak demand theory even though I think that the so-called peak demand theory where alternatives are going to significantly reduce the demand for crude is quite overblown. We all remember the theory of peak oil where the world was going to run out of oil. Now we're on the other end of the argument where we're concerned about peak demand. Our take is that we're still going to see a significant increase in the use of fossil fuels for many years to come. I believe that the transition to green energy such as solar, wind, and electric cars have a lot more challenges than the environmentalists believe. We don't believe that we're going to see peak demand anytime soon and probably not within the next 30 years. If that's the case, then the UAE should not be too worried about making more and more money before demand falls off. Demand growth may be smaller than it would have been, but make no mistake about it, the world is going to need fossil fuels for the foreseeable future and beyond.

The Biden administration is getting more and more concerned about the rising gasoline prices. They're starting to read the polls that increasingly are showing that consumers are putting blame on the Biden administration for the price increases and well they should be. The Biden administration is going to try to argue that they are virtuous when it comes to low gasoline prices but their policies suggest the opposite. This is evidenced by the drilling moratorium, canceling the Keystone Pipeline, putting more restrictions on drilling, more restrictions on pipeline operators, frightening investors away from fossil fuel investment. These are all contributors in this meteoric rise in gasoline prices.

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