With the intensity of a boxing trainer watching his champion in the ring, policy makers, analysts, and economists are watching every little movement in the oil markets, as they scrutinize rig counts and pore over any available market report to try to peer into the future of oil. In Nigeria and many petroleum oil dependent countries, policy makers are once again eagerly looking for the $50 a barrel mark. Fortunately, they are not sitting at a $30 a barrel position from where they suffered early in 2016. So what happens now? What is the future of oil? Can present day supply and demand tell us anything? So let us look at the demand side. The current major global conversation is about about the future of crude oil and how soon before it becomes a sunset industry. With electric cars that depend on batteries and are easier and cheaper to operate and maintain and also, renewable energy platforms that provide cleaner energy than petroleum who will be looking in the direction of crude oil? Yes I know that many petroleum industry protagonists, solicitors and advocates are staunchly arguing that crude oil demand is without end. This is what also happened when we converted from the energy of camels, horses, buggies, and even slave labor. I agree with them that because crude oil has been so singularly transformational it can't fade away in its use so easily, but it will. First it will, because people know it is not exactly renewable and therefore they would rather invest in devices and mechanisms that will use renewable energy. Second, looking at the supply side, a day will certainly come when it will be all gone. So what happens to nations that just talk about economic diversification without aggressively coming up with policies that ensure that it happens steadily. Well, the things that happen to such nations will happen to them. And it is not usually good. The time has come for our scientists and business people to be more innovative. The time has also come for our policy makers to stand up. I am Magnus Kpakol, and that is my view.
Posted: Jun 28th, 2017 @ 01:47:42 AM