The oil glut and low prices reflect an affordability problem

Our Finite World

For a long time, there has been a belief that the decline in oil supply will come by way of high oil prices. Demand will exceed supply. It seems to me that this view is backward–the decline in supply will come through low oil prices.

The oil glut we are experiencing now reflects a worldwide affordability crisis. Because of a lack of affordability, demand is depressed. This lack of demand keeps prices low–below the cost of production for many producers. If the affordability issue cannot be fixed, it threatens to bring down the system by discouraging investment in oil production.

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About gerryhiles

OK "Know Thyself." Socrates. "To thine own self be true." Socrates. "The unexamined life is not worth living." Socrates. That about sums me up, but of course is an ongoing attempt which I do not expect to fully realize, even if maybe such as Socrates and Jung did in their last moments.
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