The scary part is that $2.00 gas might be the good news. Because while the rest of us seem to have been happy to ignore the good old laws of supply and demand, Adam Rozencwajg, he of those spot-on predictions, has been busy tracking the oil market these last 12 months. Based on how much oil is currently being produced — and more importantly, how muchbe produced in the near future — he says the smart money sees the cost of oil soaring to US$150 and even $200 a barrel.
It’s an enormous understatement to say the formula for oil pricing is complicated. First, though, as Rozencwajg pointed out a year ago, exploration for new reserves was already dwindling pre-2020. COVID-19 then put what we all thought was going to be a long-term damper on demand. Exploration, especially in the U.S., was even more severely curtailed.Article content
Rozencwajg says much of this seemingly self-destructive tightening of budget is due to activist investor groups. By way of example, he cites the case of, the world’s largest oil producer not sporting a Saudi flag. Through the vagaries of proxy voting — and truly, you don’t want the entire intrigue explained — Engine No. 1, with but 0.02 per cent of ExxonMobil shares, somehow hoarded three board seats. Next stop, says Rozencwajg, is Chevron, the goal in both instances to choke off oil supply.
That might not be the worst of it. According to Rozencwajg’s analysis, if demand were to return to its previous peak of 101 million barrels a day, there simply might not be enough oil to go around. Indeed, this might be the oil crisis to end all oil crises. As Rozencwajg explains it, previous oil shortages were artificial — someone, usually the Saudis, cutting supply in a deliberate attempt to raise prices. There was enough oil to supply demand; they simply chose not to sell it to us.
drivingdotca It’s literally Canadian government policy to increase the price and scarcity of fuel, to the point people stop using it. Policies which post media have cheered. So stop lying by asking a question you know the answer of.