Energy Report: You've Come A Long Way

The global oil market has come a long way since oil prices plunged a year ago into negative territory. Now a year later the strength of the market is a reminder of how low prices can cure low prices and that a price drop that shocks the market because of oversupplies creates the recipe for shortages in the future. The fact is that the shock of low oil prices forced oil producers around the globe to cut back not only production but investment and because of some of the crazy predictions at that time that the price of oil would never rise again had them cut back too much. Predictions that the world had hit ‘peak oil demand” and that oil demand would never recover looks laughable now especially with the track of demand growth we are seeing in Asia and to a lesser extent the United States.

Petrol, Gasoline, Diesel, Gas, Automotive, Prices, Oil

Image Source: Pixabay

Even the predictions of the world going carbon neutral will cause peak demand do not look realistic as carbon emission increases are soaring and China is adding more coal plants like crazy despite the claims by the Biden Administration that the U.S. is falling so far behind China when it comes to green energy technology. Oil Price reported that “Despite commitments to become a net-zero emission economy by 2060, China—the world’s biggest carbon emitter—commissioned more coal-fired capacity last year than the rest of the world retired." China’s coal boom in 2020 more than offset the retirements in coal capacity in the rest of the world, leading to the first increase in global coal capacity development since 2015, a report led by Global Energy Monitor (GEM) found. China commissioned 38.4 gigawatts (GW) of new coal plants in 2020, offsetting the record-tying 37.8 GW of coal capacity retired last year, the report showed.

This comes as the International Energy Agency says that global CO2 emissions from energy could rise almost 5% this year, suggesting the economic rebound from COVID-19 could be "anything but sustainable" for the climate. The IEA's Global Energy Review 2021 predicted carbon dioxide emissions would rise to 33 billion tonnes this year, up 1.5 billion tonnes from 2020 levels in the largest single increase in more than a decade.

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