“Humanity has failed to make sufficient progress in generally solving foreseen environmental challenges, and alarmingly, most of them are getting far worse. Soon it will be too late to shift course away from our failing trajectory.”
A communique from 15,000 scientists from 184 countries assessing the world’s latest responses to various environmental threats (11/14)
Oil prices fell for most of last week, but then rebounded to close at $56.55 in NY ($62.73 in London) on Friday. This was only a dollar or so a barrel below the recent high set the week before last. As usual, there were numerous factors impacting oil prices. OPEC reported a small drop in October production due to lower output from Iraq, Nigeria, and Iran. OPEC also said it expects global demand for oil to grow by 1.5 million b/d this year and again in 2018. The IEA is not so sure that demand will be so strong, noting that crude prices have risen by roughly 20 percent since early September and now the “market balance in 2018 does not look as tight as some would like and there is not, in fact, a ‘new normal’.”
“There isn’t a viable alternative to fossil fuels on the horizon. We’re not buying into the long-term demand destruction for oil.”
Alasdair McKinnon, portfolio manager at Scottish Investment Trust
“Vehicles of the future will no longer be driven by humans because in 15 to 20 years — at the latest — human-driven vehicles will be legislated off the highways. The tipping point will come when 20 to 30 percent of vehicles are fully autonomous. Countries will look at the accident statistics and figure out that human drivers are causing 99.9 percent of the accidents.”
Bob Lutz, former executive with major auto company
Oil prices leveled off last week with New York futures closing at $56.74, up more than $20 a barrel since June. Brent closed about $7 higher at $63.52. As has become normal these days, multiple factors impacted the oil prices last week pulling the markets in both directions. While the arrest of over 200 important princes, ministers and industrial leaders in Saudi Arabia on charges of corruption early in the week roiled the markets for a few days, by the end of the week the markets were largely ignoring what could morph into a major Middle East crisis or even hostilities.
“There’s a complacency that shale is going to continue to produce at the kind of volumes that we had in the past…If the world keeps believing we’ve got surplus oil as far as the eye can see—which I don’t believe—then the reality is going to smack everybody in the face. And it will be hard to catch up.”
Jim Brilliant, portfolio manager for Century Management
The price surge, which began in mid-September, continued last week with NY futures closing Friday at $55.64 and London at $62.07. The $6.50 spread is leading to ever higher US exports which are now above 2 million b/d. Crude prices are at their highest level in over two years. Behind the price surge has been the steady stream of hints from the Saudis and the Russians that they are ready to back an extension of the production freeze through 2018 at the November 30th meeting. Some are asking whether the major oil exporters will be willing to continue a production freeze if prices move much higher. There now is a solid perception among traders that the global crude stocks are declining and that demand is rising. This in addition to the OPEC hype is contributing to the price surge.
