What’s going on with oil? Not a day goes by without extensive commentary on (literally) the fuel of the industrial economy worldwide. Plunging oil prices. Keystone and pipelines to the southwest or Canadian east? At the Financial Post this weekend, two of six trending topics are Keystone XL and oil prices. Baker Hughes may or may not merge with Halliburton. Fracking and the shale revolution continues to bring the United States closer to energy self-sufficiency. Saudi Arabia seems happy to supply the West with cheap oil even as that puts the squeeze on nations like Iran and Russia, and other petro nations that desperately need much higher oil prices. And what of Canada’s oil sands? Also in the Post, Yadullah Hussain ties together many of these disparate threads a piece headlined Who will blink first as global oil prices collapse?
Not the consumer, surely? Our family runs two hybrid vehicles but we’re still happy to be able to buy cheaper gas. Airlines and the travel industry surely welcome this development.
What about peak oil?
What ever happened to peak oil? Have we heard from Jeff Rubin lately? Here’s a piece from Canadian Business written two years ago about whether his call was wrong. His book suggested sky high oil prices meant we’d curtail travel and become more local. Luxuries like salmon would become prohibitively expensive?
Weren’t higher oil prices supposed to be inflationary? And wasn’t that supposed to be bad for the stock market? So aren’t low prices to be cheered, unless of course you’re overweight oil stocks?
Here at the Hub, we don’t profess to have all the answers but we will endeavour to point to sources that can shed light on complex geopolitical topics like this one.
This is a theme we will keep close tabs on.