The Future Evolution of Demand

Anyone who’s been in the oil business for more than, say, a month, knows how ridiculous it would be to confidently predict where oil and gas prices are headed. Tensions in the Middle East, growing output from the Permian, offshore adds to reserves in Guyana and Brazil, uncertainty over tariff implementation, pipeline infrastructure buildout timing, tax policy implementation, legacy refinery crude quality limitations, storage builds, price of the dollar—these are just a few of the many drivers that affect wellhead pricing of oil and gas. It’s a thoroughly bewildering set of variables, and probably beyond the analytical capability of most mortals. More often than not, our discussions and musings about oil and gas prices focus on supply. So, I’m going to avoid putting on my dunce cap, but I am going to look at the demand side of oil and gas while questioning the assumptions we all make about hydrocarbon demand. My guess is that most folks, when they think of future demand, envision the rest of the world achieving first-world status like Western economies did—through a drawn out industrialization process that required massive amounts of infrastructure and fuel to power the mobility of goods, services, and people. We’ve certainly… continue reading

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