The World Has Too Much Oil
The world’s energy companies produce record amounts of oil, and the US leads the list. Last December, America produced more oil in a month than any country in history. This is a far cry from the 1970s when the US was oil-poor.
Despite efforts to cap production, OPEC+ also runs at close to maximum capacity, keeping crude oil prices under $75 a barrel. Additionally, China, the world’s largest importer, suffers from a slow economy.
The world has too much oil. According to Reuters. “Global oil demand growth needs to accelerate in coming months, or the market will struggle to absorb an increase in oil supply that OPEC+ is planning to make from October, according to data, analysts, and industry sources.” The fact that America has slightly more green power also contributes.
The news has shown two major trends. The first is the hugely profitable exploration and production of oil. Multinationals like Exxon and Aramco have no reason to curb this activity. Oil companies are here to stay.
Second, despite some growth in green energy production, particularly in China, not enough nuclear, solar, and wind power has come online at inexpensive prices. Oil companies have no real competition. So, it is drill, baby drill. Exxon has a reputation that hasn’t hurt it.
The world has too much oil, and it will for some time.
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