Germany is a prime example of a large industrialized nation that uses renewable energy in mind blowing capacity. It costs subsidies initially but the momentum has been cemented and there is broad based support in society, oil and natural gas dependence will only further decrease over time without replacing it by nuclear energy.
That would have been my guess, but I haven't looked at the research. I do know that prices go up or down based on the relative aggressiveness of buyers and sellers. I also agree that the commercials have better information than other players. But does that presuppose that commercials are necessarily the aggressors in any particular price move? Too many moving parts for me, so I ignore it for my purposes.
As any industry veteran and they will tell you that the prop groups at Shell, ExxonMobil, BP are all not doing fantastically great. What does that tell you? That they know not a bit more about the eminent strike, pipeline sabotage, hurricane impact, political decisions by opec and non opec members than any other informed player in the industry. The oil market is way too big for a single company and its prop group to sway prices just because they are better informed about their own company projects.
Yes, Zzz1, there is also the matter of commercials getting it wrong despite their being better informed on balance. Yet another (annoying) moving part... And so, I will sit on the sidelines and watch the exchange between you and Mav.
Certainly, there are a lot of politics and concern regarding market share involved as always (and OPEC seems to be functioning surprisingly well right now), but ultimately it all goes back to profit. You seem to be saying margins don't matter. Do you mind explaining your thinking further?
Margins do matter but for many top players nearly not as much as for American firms, or Russia. Also Saudi Arabia and other Middle Eastern producers can profitably extract at 10-15 bucks a barrel. Their coffers are filled to the hilt. Even Norway finances it's entire social welfare program from the returns of its sovereign weather fund, entirely invested through oil proceeds. Profits matter but nearly not as much as market share because market share means power and leverage. It is way more important than profits for especially middle eastern players
You seem overly sure of your view. For me it's a coin toss at the moment. If you are talking 30-40 years out in time, you may have a point, but I don't think that is the time horizon you had in mind. Oil could easily be at 30 bucks in 2 years time. And it could easily be at 70 in 2 months time. I'm playing both sides. H.
Renewable energy is only 13.44% of the total energy market. It will take decades and a lot of subsidies before renewable is cheaper than hydrocarbons. Glut in the marketplace will hurt US, Canada rather than SA as they have the cheapest cost of production. Yes oil could be $30/ barrel but will it stay there as US, Canada and others need $50/ barrel plus to stay in the game.