In 2009, we forecasted the price of crude (WTI) in 2015 and 2016 several times since [1, 2, 3]. These estimates varied between $22 and $60 per barrel in 2016. A few days ago, Saudis put forward a strong message that $20 per barrel will be bearable for them in order to retain their share in the global oil market. This message is in line with our prediction from June 26, 2009 of $22 per barrel in 2016. This also means that the oil price war is actually ahead - it's a long way down to 1/3 of the current price. It is clear that the world's economy and global political structure will be dramatically reshaped in the second part of the 2010s.
It is time to formulate hard questions.
How the US government will tackle consumer price deflation when energy (more than 10% of the headline CPI) falls by a factor of 2?
What will happen to the 2016 US elections with the oil (and other resources) lobby without money?
How the role of China will change with cheap energy?
The last question is the most simple: China will increase it's power and influence. It will have a lot of dividends from the situation.
ReplyDelete"2016 US elections": oil lobby will fail and they will elect highly militarist president. I just hope he won't start 3-rd hot war...
ReplyDelete