Our models tell us that we have run out of spare oil capacity. What comes next?
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Running Out of Spare Oil Capacity - What's Next?
The article below is an excerpt from our Q1 2022 commentary.
On Between 2010 and 2020 the world grew accustomed to cheap, abundant conventional energy. Global energy markets were so well supplied for so long that neither investors nor consumers gave energy markets much thought. We were one of the few warning that an impending energy shortage and crisis would emerge in the next several years. The calm of the past decade has been turned upside down seemingly overnight. Conventional wisdom holds that today’s energy shortage is the result of Russia’s invasion of Ukraine; however, we strongly believe this is incorrect. While Russia’s invasion has made the energy shortage much worse in the short term, the underlying problems have been building for many years and cannot be easily remedied.
Our biggest short-term problem is that we are now running out of spare oil pumping capacity.
Goehring & Rozencwajg Associates 110 Wall Street | New York, NY 10011
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