Oil Prices

[Boon]

http://www.indexmundi.com/energy.aspx

Look at the world oil consumption chart and table - what could better explain the increase in consumption other than the increase in world population, over the years?

Boon san

Bottom line is that economic growth drives oil consumption. However, definition of oil might be a fluffy one too, with condensate, natural gas liquids etc being counted too. I agree with Robert Rapier that the cure for low oil prices is low oil prices.

My immediate worry is that oil prices does not remain low for a sufficiently long enough time to kill off marginal players or at least delay their production significantly. If they remain sufficiently low, it would create another mega opportunity to make big bucks in the next boom.

Hi HitandRun,

Agreed - Economic growth drives oil consumption - but of all the drivers of economic growth – population growth is probably the most significant (not the only driver) - the correlation between world oil consumption and world population growth is strong.

Hence, IMO, it would certainly be hard to fault “sgd” for arguing that increase in world oil consumption over the years has been driven by population growth.
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Would oil prices remain sufficiently low for sufficiently long enough time to kill off marginal players and set the base for the next boom ?

Well, as long as volatility remains - there are always opportunities to make big bucks (and to lose big bucks).............ha-ha !

Here is a good article:

Oil prices: boom, bust and boom again
Paul Horsnell
December 9, 2014

.......................Volatility in oil prices is nothing new. However, the main danger for the global economy is that the oil industry will respond the way it always has done. If non-Opec investment is slashed once more, and the industry again sheds skilled labour at the first sign of trouble, then the next ride up in prices may prove just as wild as the previous ones.

http://www.ft.com/intl/cms/s/0/7cf27c68-...z3PwVR8c8N