• 3 minutes Don't sneeze. Coronavirus is a threat to oil markets and global economies
  • 5 minutes Boris Johnson taken decision about 5G Huawei ban by delay (fait accompli method)
  • 9 minutes This Battery Uses Up CO2 to Create Energy
  • 12 minutes Shale Oil Fiasco
  • 3 hours Historian Slams Greta. I Don't See Her in Beijing or Delhi.
  • 9 hours We're freezing! Isn't it great? The carbon tax must be working!
  • 1 day Indonesia Stands Up to China. Will Japan Help?
  • 20 hours US (provocations and tech containment) and Chinese ( restraint and long game) strategies in hegemony conflict
  • 8 hours Beijing Must Face Reality That Taiwan is Independent
  • 1 day Tesla Will ‘Disappear’ Or ‘Lose 80%’ Of Its Value
  • 1 day Environmentalists demand oil and gas companies *IN THE USA AND CANADA* reduce emissions to address climate change
  • 23 hours Might be Time for NG Producers to Find New Career
  • 2 days Phase One trade deal, for China it is all about technology war
  • 18 hours Trump has changed into a World Leader
  • 2 days Anti-Macron Protesters Cut Power Lines, Oil Refineries Already Joined Transport Workers as France Anti-Macron Strikes Hit France Hard
  • 2 days Angela Merkel take notice. Russia cut off Belarus oil supply because they would not do as Russia demanded

Renewables Already Limit Upside For Oil

Renewables

Your author is a firm believer in the idea that sentiment- rather than fundamentals- drives market prices in the short term. That’s why our notes tend to obsess over sentiment measures like hedge fund positioning, options markets and time spreads instead of longer term supply and demand balances. As Lord Keynes once put it- “the market can stay irrational longer than you can stay solvent.”

You often get more bang for your buck as a trader if you can accurately gauge the temperature of the herd as opposed to having prescient calls related to fundamentals or geopolitics. Nevertheless, we still need to work to have as good an understanding as we can on long term oil market themes and were excited as always when BP recently released their comprehensive Energy Outlook for 2019 last week. After a not so quick read, the trend which most interested us was the discussion of renewable energy and electric vehicle market penetration in the context of what we view as short term bearish issues with US gasoline demand growth.

BP sees renewable energy supplying about 4% of total energy today and expects that figure to reach 15% by 2040. The company also argues that renewables will become the largest source of power generation by 2040. To paraphrase BP Chief Economist Spencer Dale, this would represent the fastest penetration of the world’s energy system of any fuel in history.

Just for fun, let’s assume that BP’s forecast is ultimately…




Oilprice - The No. 1 Source for Oil & Energy News