$200 Oil In 2 YearsPosted: May 26, 2009
As the economy starts to turn the next big worry is inflation. The Saudi oil minister was just quoted saying that the crisis has reduced the ammount of investment into production, which will impact the global markets through rising oil prices. It is true that one of the reasons that the oil came down from $150 was the recession and reduced demand. A large portion of the uplift in the price per barrel was also due to pure speculation and that should not be allowed to happen again. I personally do not see $200 per barrel prices, just because of economic recovery and increased demand. To me it sounds like oil producing countries and major oil companies taking back recession losses.
At $200 per barrel we will see a huge shift towards green again and energy efficiency will be top of mind again. Geothermal will be profitable again. Electric cars will make financial sense. There will be discussion about building more nuclear plants to feed the grid and meet growing demand. Heat pumps, duel fuel, solar, etc. will thrive.
There will be an increase in demand for public transportation. The way we buy and work will also be impacted.
At $200 per barrel what will happen to air travel? Will airlines serve even refreshments on transatlantic flights? Teleconferencing will be popular.
Imagine Europe where people are already paying four times the price for a gallon. Now let’s quadruple that again ;O) 6 Euros per liter!!!! Yeah!!!!