Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

How Will Falling Oil Prices Impact on Climate Change?

Commodities / Climate Change Apr 05, 2017 - 06:16 PM GMT

By: Submissions

Commodities

The state of the oil market has remained a talking point for months now, after prices plummeted and supply lines increased for the third consecutive year in 2016. While the OPEC has finally taken action and attempted to broker separate deals between member and non-member nations, there remain some concerns that a lack of universal cooperation will ultimately doom these agreements to failure.


While leading oil producers Iran have already baulked at the proposed OPEC cap of 1.2 million barrels per day (bpd), for example, non-affiliated nation Russia are also thought to have issues with the lower limit of 600,000 bpd. Similarly, non-OPEC member Kazakhstan are keen on actively increasing their output in 2017, as part of a wider growth project and government infrastructure expansion. This ongoing issue has already had a cumulative economic impact, creating noticeable volatility for currency traders and exposing worrying, geopolitical disputes as well as impacting on international money transfers.

If Oil Prices Remain Low, Will This Take a Toll on Climate Change and the Use of Natural Gas?

Of course, the main aim of the OPEC-imposed cap is to create a greater equilibrium within the market, while ensuring that prices are balanced, fair and competitive. Without the cooperation of all OPEC and non-OPEC nations, however, supply will continue to outstrip demand and keep prices below their desired level (and far removed from previous peaks).

Interestingly, a new study in Nature Energy has suggested that excess supply and low price points in the oil market will also impact negatively on the burgeoning, natural energy sector. This is because greater accessibility and consistently low prices tend to trigger higher levels of oil consumption, which in turn increases carbon emissions and limits the opportunity for natural gas and energy. In fact, low prices could increase emissions by an estimated 36.5 gigatonnes (Gt) each year, regardless of the financial incentives or caps imposed by public agencies.

It is hard for natural gas and energy supplies to compete with the availability and affordability of oil in the current market, and this trend is likely to continue further in the near-term future. After all, the cost of harnessing natural gas has historically proved to be exorbitant, particularly in comparison with the less efficient but more familiar and cost-effective fuel alternatives. Conversely. There are concerns that Australia is currently allowing firms to pump natural gas too cheaply as part of its large-scale, LNG (liquefied natural gas) project, in a bid to compete with the oil market and recoup some form of ROI.

The Bottom Line and the Future for Renewable Energy

With supply continuing to outstrip demand in the oil market (and as nations struggle to leverage the potential profitability of natural gas alternatives), we are likely to see higher carbon emissions in the near-term future. This is bad news for the environment and climate change as a whole, as we are unlikely to see the widespread adoption of natural fuel until it is able to provide cost benefits to professional and personal users alike.

This represents just the tip of the iceberg for global climate change, particularly given the position of incoming U.S. President Donald Trump and his decision to fill his cabinet with renowned environmental sceptics. Remember, the U.S. remains a leading supplier and importer of oil and fossil fuels, so Trump's premiership is likely to see the marginalisation of natural energy sources. The discovery of the Wolfcamp Shale oil site in Texas is also bad news, as this is thought to be the largest single site of its type in North America and will increase supply extensively in the longer-term.

Disclaimer: This is an paid advertorial. This is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any investing and trading activities.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in