Archives par mot-clé : Prices

energy and fields

Mining Industry Warns Energy Transition Isn’t Sustainable

by I. Slav, Jul 03, 2022 in OilPrice

  • There is a glaring problem in the energy transition that not many people are acknowledging.

  • It is being built on the back of finite resources, and the mining industry is already warning that there aren’t enough metals for all the batteries the transition will require.

  • Because of the short supply, prices are on the rise, as are prices across commodity sectors.

    The energy transition has been set by politicians as the only way forward for human civilization. Not every country on the planet is on board with it, but those that are have the loudest voices. And even amid the fossil fuel crunch that is beginning to cripple economies, the transition remains a goal. It is no secret that the transition—at the scale its architects and most fervent proponents envisage it—would require massive amounts of metals and minerals. What does not get talked about so much is that most of these metals and minerals are already in short supply. And this is only the start of the transition problems.

    Mining industry executives have been warning that there is not enough copper, lithium, cobalt, or nickel for all the EV batteries that the transition would require. And they have not been the only ones, either. Even so, the European Union just this month went ahead and effectively banned the sales of cars with internal combustion engines from 2035.

    “Rare earth materials are fundamental building blocks and their applications are very wide across modern life,” a senior VP at MP Minerals, a rare-earth miner, told Fortune this month. He added that “one third of the demand in 2035 is not projected to be satisfied based on investments that are happening now.”

    Because of the short supply, prices are on the rise, as are prices across commodity sectors. According to a calculation by Barron’s, the price of a basket of EV battery metals that the service tracks has jumped by 50 percent over the past year as a result of various factors, including Western sanctions against Russia, which is a major supplier of such metals to Europe.

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energy and fields

Whither US Oil Production?

by. P. Homewood, Mar 13, 2022 in NotaLotofPeopleKnowThat

This single chart from the US EIA explains just why oil prices are shooting up there:

https://www.eia.gov/petroleum/production/

…

The oil boom initiated by Trump saw crude oil output increase by a half between 2016 and 2019.

Output naturally collapsed in early 2020 as a result of the pandemic, which affected both supply and demand. But since then output has only slowly recovered, and is still 9% below 2019 levels.

It is worth pointing out that demand in 2021 was still not back to 2019 levels. Assuming it recovers this year, it is likely to put further upward pressure on prices, unless production increases as well.

To put the numbers into perspective, the US produces a sixth of the world’s crude oil. The increase US output between 2016 and 2019 was 205 million tonnes, and represents 5% of global output.

Small changes in supply have a disproportionate effect on international oil prices, because demand is so inelastic. An extra 5% on world production would have a significant impact on prices.

 

 

energy and fields

Energy Prices Falling Rapidly

by P. Homewood, March 7, 2019 in NotaLotofPeopleKnowThat

The renewable lobby often claims that the rising cost of fossil fuels will help make renewable energy competitive.

However, oil and gas prices remain stubbornly uncooperative. Gas prices in particular are back down to levels seen last spring, after peaking last autumn.

As is usually the way, power prices have followed the same pattern.

Oil and gas are very much cyclical markets. When supply is tight, prices rise, thus attracting more investment to increase production.

Prices therefore fall, cutting profitability and new investment, and setting the whole cycle back in motion again.

How long supply can keep meeting ever rising demand is a moot point. But there is little sign of anything changing in the foreseeable future.

http://www.catalyst-commercial.co.uk/reports/227/energy-market-report—mar19/