Crude oil prices have accelerated again recently. NYMEX crude oil prices have risen above the US$80 mark in one fell swoop, setting a new high since 2014. The direct cause is that OPEC+ is still unwilling to accelerate production growth despite the fact that global energy demand is rapidly heating up. Industry insiders pointed out that if oil prices continue to remain high, alternative energy investment may be forced to accelerate further, and it will cause a counterproductive blow to the crude oil market in the future.
Since the beginning of this year, global conventional energy prices have gone up across the board, driven by the leading increase in natural gas. Oil and coal prices have also reached new highs due to the emergence of alternative demand. Due to the high cost of natural gas, a large amount of demand has shifted from natural gas to the oil sector. Because crude oil is a liquid, it is easy to use, and has a wider range of uses than natural gas, and it is reasonable to have a higher price. Once the price of natural gas per unit of calorific value exceeds that of oil, it may be considered that the price has inverted.
However, the price of natural gas has indeed been significantly higher than that of crude oil. If the natural gas price of the Dutch Property Transfer Fund (TTF) as a European indicator is converted into crude oil, it is equivalent to 160 US dollars per barrel, which is West Texas Intermediate Crude Oil (WTI). ) About 2 times of futures. Therefore, in Europe and Asia, the trend of relatively cheap crude oil being used as fuel for power generation has begun to expand.
The recent contract of NYMEX crude oil futures rose to US$80.11/barrel on October 8, breaking through the US$80 mark for the first time in 7 years. For oil-producing countries, fiscal revenue will increase accordingly, which does not seem to be a bad thing, but some member states say that excessive oil prices may bring long-term negative consequences, which will accelerate the "resurrection" of the U.S. shale oil and gas industry. And to attract more investment in the field of new energy.
In fact, the US crude oil industry has indeed begun to recover after nearly two years of "dormancy". According to statistics from Baker Hughes, a US oil service provider, the number of drilling equipment that reflects the trend of shale oil extraction in the United States was 433 as of October 8. Although it is still nearly 40% less than the end of 2019 before the new crown epidemic, it has more than doubled compared with the low point of 172 in August 2020.
In the 10 years since the start of the "shale oil revolution", as long as oil prices rise, shale oil companies will increase production, and the crude oil market will collapse. Such a cycle has occurred many times, making the Middle East oil-producing countries and Russia quite difficult. Feel hurt. At the moment, OPEC+ has once again given up market share in order to maintain prices, which has laid the roots of another dramatic collapse of oil prices in the future.
However, OPEC+ not only has a competitor of shale oil, in fact, the high price of fossil energy this year will force the investment in new energy to be further deepened. Although the lack of electricity in Europe this year shows that the reliability of wind power and solar energy is still a new problem that needs to be solved, it can still be solved after the equipment capacity and storage facilities are further increased. The greater the increase in natural gas and crude oil prices in the short term, the more sufficient investment and attention will be received in the field of new energy.
Statistics from the International Energy Agency (IEA) show that investment in renewable energy will exceed that of upstream businesses such as oil and natural gas for the first time in 2020. The sudden global energy shortage is more likely to become the entrance to the end of the oil age.
Previously, Ahmed Zaki Yamani, the former oil minister of Saudi Arabia, who has been leading the oil strategy for many years and who passed away this year, also said that the Stone Age did not end with the disappearance of stones. It is because of the emergence of new technologies (bronze, iron, etc.) that replace stone tools. Oil is no exception. Before the depletion of oil resources, its rising cost ratio will force the development of alternative energy technologies, thereby making fossil energy increasingly marginalized under the squeeze of new energy sources. In the past ten years, the relatively cheap oil and gas resources brought about by the American shale revolution once slowed the progress of new energy research and development. But right now, this process has accelerated again.
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