WTI crude prices fell sharply last Friday as investors worried that OPEC members and their external partners, such as Russia, might not deepen existing production cuts that have been holding the price of oil this year. However, the future of the probably most relevant raw material of the last century, which has allowed several technological disruptions, may not be as giggle as it was about 10-15 years ago, when the world reserves were in risk of being depleted. Today the scenario is very different, at first because shale oil production has completely revolutionized the industry and giving the US not only the independence it was pursuing, but also in the short term will allow the world’s largest economy to come very close to the world’s leading producer, Saudi Arabia.
But in addition to the increase in production, the expected reduction in demand is expected in the short term due to the trade war, as the International Energy Agency has warned, but mainly in the medium to long term with the massification of other energy sources. such as renewables, which will fuel the foreseeable “electrification” of mobility. The golden times of “black gold,” as it was once dubbed, may well have ended in July 2014, when in just six months it went from $107 a barrel (WTI crude) to $43 a barrel, and year later in January 2016, reached the lows of $27.54 per barrel.
Photo by John Cameron.
I remember perfectly around the year 2015 the words of the Saudi Arabian Oil Minister at the time, when he said that $100 crude never again, and the truth is that to date this has not happened and the prospects are that it will not happen in the short-medium term, as after a rebound to the $77 per barrel zone at the end of 2018, the price of oil has been lateralizing between $40 and $60 a barrel and is now slightly bearish in outlook, as it broke down an upward channel in the daily time frame.
