Peak cheap oil

Although Barclays Capital expects the crude market tightens by 2.4m barrels a day (bpd) this quarter, with little extra supply in sight, and  Goldman Sachs said the industry is chronically incapable of meeting global needs – “It is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand,” said its oil guru David Greely – (The Telegraph) the International Energy Agency (IEA) sees no physical disruption in oil supplies that would warrant a release of strategic oil reserves. However, IEA remains prepared to act, the head of the Paris-based organisation said on Friday (Reuters). It’s worth remembering IEA’s analysis was released before of the giant explosion at the biggest Venezuela’s oil refinery (645k bpd supplied to market). See the video here.

“Nothing has really changed since the IEA warned four years ago that the world must invest $20 trillion in energy projects over the next 25 years to feed the industrial revolutions of Asia and head off an almighty crunch. The urgency has merely been disguised by the Long Slump. Peak cheap oil is an incontrovertible fact”, Ambrose Evans-Pritchard comments on The Telegraph (linked above).