BEBUDAK UMNO, TOKEY KETUANAN SILA BACA - OIL PRICES CRASHING AGAIN : US$ 75 - US$76 PER BARREL NOW

 Oil prices (WTI) have gone down to US$75 to US$76 per barrel yesterday and today. 

And here is the one month chart: Just 30 days ago oil was at US$102 per barrel. Its US$75 - 76 now. 

What does this mean? Left on its own, without hiccups and artificial disruptions oil prices will collapse. This is what is happening. The Iran War appears to be over though not fully yet. The mad mullas are not going to sign anything and after another 60 days we dont know what will happen. It could be shooting all over again. The fat lady has not sung yet. Lets hope for the best.

The other big peace dividend that will happen is Ukraine. Possibly by November this year. 

Hawkish Russian analysts say that by end 2026 the four main cities:

• 1. Kyiv will be encircled or face political collapse forcing Ukraine to negotiate; some even speak of capturing the city.
• 2. Kharkiv: Capture of the city after gradual advances from the north and east.
• 3. Zaporizhzhia: Capture of the city (OSTB: almost complete) and consolidation of the entire oblast.
• 4. Odesa: Isolation from the rest of Ukraine and eventual capture, depriving Ukraine of Black Sea access.

So there will likely be a resolution of the conflict by end 2026. Russia wants its frozen assets released, the sanctions removed, Russian oil will flow again. 

The US and plenty of Europe want this to happen. When that happens oil prices might CRASH to US$40 per barrel. (In 2016 oil prices hit US40 per barrel).

• There is a simple reason for this.
• World oil consumption is about 105 million bpd.
• World oil production now, despite Ukraine war, Iran war is 108 million bpd.
• This is already an oversupply situation.
• Minus Iran Ukraine wars, world oil production will jump. Oil prices will crash.
• Oil demand is still stuck at 105 million bpd.
• China consumes about 16 million bpd. This figure has plateaued.

Here are two charts. The first one China's oil consumption for the past 10 years.

As you can see the Chinese oil consumption has flattened out. For their energy China is becoming almost completely EV, renewables and most important of all nuclear.

Here is the more interesting chart. Here is the projected oil demand in China until 2031 - five years from now.

The projections are that Chinese demand for fossil fuels (oil and gas) will decline beginning about end 2027 - that is next year folks.  That is also when world oil production will still be increasing. 

Sheikh Yamani once famously said, 'The Stone Age did not come to an end because we ran out of stones'. 

Similarly the oil age will not come to an end because we ran out of oil. 

I am just so glad this will happen again - and in our life time. I am holding on to my 29 year old Mercedes. I have owned this engineering masterpiece for the past 29 years. It runs on petrol. 

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.