248
though. Typically LNG would be quite an expensive way to get gas. But just giving
European gas buyers optionality, creating an alternative source of supply for them
has been a very significant development in European gas, and it is one of the things
when you look at the number of new gas terminals for LNG that have been built
across Europe in the past decade, and that is one of those things really which would
be very significant even if not a single molecule of gas ever flowed through those
terminals, just the knowledge that they are there, and you know their providing
alternative is very important.
Any increase in energy prices means other industries lose and therefore consumers lose. Trump wants to pursue an America first policy on energy, but that would on
the whole be damaging to the economy. The Trump Administration has a very protectionist view on trade. The deal that Trump supposedly hoped for with Saudi
Arabia and Russia did not do very much for prices. So it is still possible that before
the year is out the Trump Administration will do something to try to strengthen
American energy production by kind of keeping the US out of the total impact of the
global market. Most Americans do not work for the oil industry, but they all drive
cars. So they prefer to see lower prices than higher. It seems we are considering a
very unusual thing and it is not clear whether that necessarily forecasts what the
American policy will be in the longer term. Currently, it is a very interesting moment
in oil; right now it may be kind of a pivotal moment in many ways and the
Coronavirus may have accelerated things and compressed time to so that things
such as bigger trends and directions, that would have happened anyway, will happen
much quicker.
The oil price decline as what we saw during the propagate of COVID-19 will be
a short-term issue however it can not set a certain date for the recovery of the economic activities to see the higher oil prices again. Indeed, we will see some longer
term impacts of Coronavirus in energy markets as the crash in oil prices which leads
to shut down the wells, will impact the characteristics of some producing reservoirs.
Nevertheless, with the lower price of oil, more pressure is felt by the production
companies which eventually pushes out the players of the supply-side with a higher
cost from the market. After any disruption in supply, demand, and price, the nature
of the oil market is to rebalance itself and finds a new point of equilibrium. We must
consider the shale companies can be bankrupted and some smaller companies with
a higher cost of production and with limited assets to hedge the risks of a lower
price will be pushed out of the market. Yet, it is not the end of shale oil and gas as
the shale rocks are still there and they are in high demand by the oil market and the
fact is the oil business cannot dismiss shale oil even with manipulating the market
by an oversupply of crude oil.
With the recent impacts of the COVID-19, the US must revise its energy strategy
from “energy dominance” to more interactive energy policy as an energy or market
moderator. The US also has understood that it cannot ignore the current market
participants as these players have been in the market for ages and also can manipulate the energy prices and make the US oil less attractive from the economic perspective. The energy export of the US will face some challenges if its price cannot
compete with other equivalent products in the market, yet, the US will stay in the
market playing a critical role as market moderator.
7 Conclusion
though. Typically LNG would be quite an expensive way to get gas. But just giving
European gas buyers optionality, creating an alternative source of supply for them
has been a very significant development in European gas, and it is one of the things
when you look at the number of new gas terminals for LNG that have been built
across Europe in the past decade, and that is one of those things really which would
be very significant even if not a single molecule of gas ever flowed through those
terminals, just the knowledge that they are there, and you know their providing
alternative is very important.
Any increase in energy prices means other industries lose and therefore consumers lose. Trump wants to pursue an America first policy on energy, but that would on
the whole be damaging to the economy. The Trump Administration has a very protectionist view on trade. The deal that Trump supposedly hoped for with Saudi
Arabia and Russia did not do very much for prices. So it is still possible that before
the year is out the Trump Administration will do something to try to strengthen
American energy production by kind of keeping the US out of the total impact of the
global market. Most Americans do not work for the oil industry, but they all drive
cars. So they prefer to see lower prices than higher. It seems we are considering a
very unusual thing and it is not clear whether that necessarily forecasts what the
American policy will be in the longer term. Currently, it is a very interesting moment
in oil; right now it may be kind of a pivotal moment in many ways and the
Coronavirus may have accelerated things and compressed time to so that things
such as bigger trends and directions, that would have happened anyway, will happen
much quicker.
The oil price decline as what we saw during the propagate of COVID-19 will be
a short-term issue however it can not set a certain date for the recovery of the economic activities to see the higher oil prices again. Indeed, we will see some longer
term impacts of Coronavirus in energy markets as the crash in oil prices which leads
to shut down the wells, will impact the characteristics of some producing reservoirs.
Nevertheless, with the lower price of oil, more pressure is felt by the production
companies which eventually pushes out the players of the supply-side with a higher
cost from the market. After any disruption in supply, demand, and price, the nature
of the oil market is to rebalance itself and finds a new point of equilibrium. We must
consider the shale companies can be bankrupted and some smaller companies with
a higher cost of production and with limited assets to hedge the risks of a lower
price will be pushed out of the market. Yet, it is not the end of shale oil and gas as
the shale rocks are still there and they are in high demand by the oil market and the
fact is the oil business cannot dismiss shale oil even with manipulating the market
by an oversupply of crude oil.
With the recent impacts of the COVID-19, the US must revise its energy strategy
from “energy dominance” to more interactive energy policy as an energy or market
moderator. The US also has understood that it cannot ignore the current market
participants as these players have been in the market for ages and also can manipulate the energy prices and make the US oil less attractive from the economic perspective. The energy export of the US will face some challenges if its price cannot
compete with other equivalent products in the market, yet, the US will stay in the
market playing a critical role as market moderator.
7 Conclusion