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- Oil is unlikely to participate in the next commodity supercycle – CE
Oil is unlikely to participate in the next commodity supercycle – CE
FXStreet reports that strategists at Capital Economics discuss oil outlook.
“While we don’t think that we are on the cusp of another commodity supercycle, we doubt that oil prices would outperform other commodities in the next one – whenever it may be – for two key reasons. The transition to green energy will lead to a structural decline in oil consumption. We expect that global oil demand will peak in around 2030 and fall continuously thereafter.”
“We think that an abundance of oil supply will place further downward pressure on oil prices. The greater flexibility of US shale production and the desire by many oil producers, particularly in OPEC+, to avoid their reserves being left untapped means that the world will soon be awash with oil. By contrast, metals mine supply involves much longer lead times, suffers from dwindling ore quality and production can’t be ramped up as quickly.”
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