Perhaps one of the best quotes I’ve heard recently on the Russia-Saudi Arabia OPEC+ spat over oil production levels has to be “with eyes held wide open by clips, we’re not likely to see much in the way of blinking.”
There is now what appears to be a race to the bottom in commodity prices, as production levels for most commodities (particularly oil and gas) remain elevated. But global demand for these goods has fallen off a cliff as the collective global consumer puts his and her wallet away and self-isolates.
This decline in the price of oil has become a symbol of what I believe to be a global problem - we’ve got too much production, and resources dedicated to this production of goods which should naturally shift via normal supply and demand fundamentals, but which have not due to artificial market manipulation, often for political purposes.
Renewable energy is generally far cheaper and more efficient to produce (notwithstanding the obvious environmental and societal benefits of such a shift), but the Organization of the Petroleum Exporting Countries and its allies have continued to entice additional production via artificially restraining production.
Canadian and American economies would be much better served, in my opinion, letting these industries die off and reinvesting the billions these governments will undoubtedly spend on bailing out these sectors in retraining oil and gas workers toward renewable energy infrastructure projects and investing monies in an industry with a much longer-term importance.
Invest wisely, my friends.
