What if the oil rebound never happens_ _ oilprice. com

Oil prices are hovering in the mid-$40s per barrel, and the hopes of a rebound have once again been delayed. Gas 1940 hopper The IEA’s September Oil Market Report predicts that the supply/demand equation might not come into balance until next year, suggesting another year of low oil prices. Electricity 4th grade powerpoint But what if oil prices never rebound?

The question seems ridiculous, not only because the oil markets always go through booms and busts, but also because demand continues to rise. Save electricity images Supplies are also falling from high cost areas, ensuring that the supply overhang will eventually be erased. Electricity nyc Moreover, the oil industry has made unprecedented cuts in spending on exploration and development. Electricity cost nyc The IEA says the industry cut spending by more than $300 billion over the past two years and a separate estimate from Wood Mackenzie expects oil and gas producers to slash about $1 trillion from spending between 2015 and 2020. Gas x strips walmart Such draconian measures are surely sowing the seeds of another supply crunch, guaranteeing a price spike in the years ahead.

But the world is still oversupplied with oil, and the recent ramp up in production from OPEC could lead to low oil prices for a few years. Electricity symbols and meanings Libya is set to bring back around 600,000 barrels per day (although those claims are questionable), and Nigeria has already returned somewhere between 200,000 and 300,000 barrels per day of interrupted supply. Electricity rates el paso Production in the U.S. Types of electricity tariff has also recently leveled off over the past month at 8.5 million barrels per day, after nearly 18 months of declines.

The IEA expects global supplies to exceed demand through next year, and inventories to continue to build through 2017. Electricity symbols ks3 Crude oil and refined product inventories are only slightly down from record levels, and will take a few more years to get worked through.

All of that is to say there is a good chance that ample supplies could ensure relatively low oil prices for several years, perhaps as long as towards the end of this decade. Gas usa Related: The Natural Gas War Burning Under Syria

In the meantime, alternatives will continue to make inroads into the transportation sector. Gas jockey Batteries for electric vehicles (EVs) continue to achieve cost declines, having fallen by 35 percent in 2015 alone. Electricity news australia Bloomberg New Energy Finance sees EVs becoming as affordable as gasoline-powered cars – on an unsubsidized basis – as soon as the early 2020s. Gas efficient cars 2016 That could erase about 2 million barrels per day of oil demand by 2023. Electricity worksheets for grade 1 Given that the global surplus in crude oil over the past two years was only a little more than 2 million barrels per day at its worst point, which was enough to cause a meltdown in oil prices, the displacement of 2 mb/d from EVs in six years is a big, big deal.

By 2040, EVs could cost as little as $22,000 (in 2016 dollars), BNEF says. Electricity 80s song Electric vehicles could displace 13 million barrels per day of oil demand by then, enough to keep oil prices permanently low. Electricity in indian states It wouldn’t stop there, if EVs made that kind of progress, the takeover of the transportation sector would accelerate and oil would continue to lose market share. Electricity in human body wiki Related: Nigeria Sues Oil Majors Over $12.7 Billion In ‘Stolen Oil’

These, of course, are aggressive scenarios, BNEF concedes. Physics c electricity and magnetism study guide But maybe not. 4 gases in the atmosphere besides oxygen and nitrogen If governments around the world crack down on oil drilling through new taxes and regulation, and also subsidize R&D and the adoption of EVs, all with an eye on climate change, the scenarios could prove to be more of a middle-of-the-road prediction. Gas works park seattle Major oil spills, or sudden natural disasters could spark a public backlash, demanding deeper reductions in carbon emissions. G gas lol In other words, the uncertainty around the advancement of clean energy could be on the upside – unforeseen future public policy could very conceivably accelerate EV adoption faster than we can envision sitting here in 2016.

Abundant oil supplies plus huge volumes of oil and refined products sitting in storage – a supply-side problem – could ensure oil price stay low in the near- to medium-term. Gas lighting urban dictionary But steady efficiency and the technological advancements in EVs – a demand-side problem – might mean oil demand ends up being much lower over the medium- to long-term than we currently expect. B games zombie These scenarios are certainly not inevitable, but if they are even remotely accurate, oil prices could stay low more or less permanently.

It is very prudent for the oil industry to contemplate peak demand scenarios. Gas bijoux soho By in large, there are huge denial blinders that must be overcome in the process. C gastronomie vitam There are two issues that continue to get overlooked.

First, it is not necessary for EVs to displace massive volume of oil consumption for the price of oil to be severely impacted. Electricity nw A mere flattening out of demand will force gasoline go compete with the price of electricity. Electricity prices by state This can easily push oil below $20/b to bring oil into parity with natural gas and coal, not to mention wind and solar which are becoming even cheaper. Gas exchange in the lungs occurs in the So don’t think that the massive size of the oil market is going to protect it from price competition. Gas pump icon When transportation fuels must compete with cheap electricity, most oil production will become unprofitable. Electricity definition physics Consumption volume will still be sky high, but most producers will have no economic future.

Second, under a scenario that most oil production becomes unprofitable post peak demand, it also follows that oil reserves will lose massive value by this same time. 100 gas vs 10 ethanol Oil producers sitting on more than 50 years of reserve to production, the global average, will recognize that their reserves will loose value faster than they can pump oil. H gas l gas In deed, if the demand peak comes within 20 years, any reserve with R/P greater than 20 is at risk. Gas hydrates india The US is at 12 year R/P, so we don’t feel this risk. A gas station near me But Saudi Arabia is at 61 years R/P. Gas emoji meaning So 2/3 of the value of the Saudi reserve is at substantial risk. Gas exchange in the lungs takes place in the The faster they ramp up production today, the lower their risk of stranded reserves.

It is increasingly a rational strategy for producers who have very large and valuable reserves to increase production to reduce R/P rates down below 30. Gas problem in babies This means the Saudis should double their rate of production, but it could take several decades to do so. Static electricity definition science This is precisely why the threat of EVs can lead to a perpetual oil glut several decades BEFORE EVs come to dominate the auto market. Gas yojana Indeed, I believe we are at a point where any oil exploration that replaces or adds to reserves is destroying the wealth of the largest reserve holders, most OPEC countries and Russia. Gas examples matter These large reserve holders cannot allow the price of oil to go high enough to increase investments in exploration. Electricity ground explained So maybe a short production freeze could increase short-term cash flow, but it comes at the cost of long-term wealth destruction. Gas vs diesel This is not an easy tradeoff. 76 gas card payment But as EVs advance, the wealth destruction of sitting on reserves will motivate a perpetual glut. Grade 6 electricity quiz The global R/P needs to drop from 50 to below 30, and this changes everything.