| | | |
All the election chaos over the past few weekends has gotten me thinking about one of the major differences between the two possible administrations we'll end up with come Election Day.
Energy policy — specifically their attitudes toward fossil fuels vs renewables — is a significant point of contention, and it has far-reaching implications for our economy and daily lives.
As traders, we need to consider what impact each possible administration will have on the markets.
Renewable energy like wind and solar often get a lot of attention, and while they are important for our future, we can't overlook the critical role that crude oil and fossil fuels still play.
Take a look around you. Almost everything we use daily has some connection to fossil fuels.
From the plastics in your phone and computer to the Styrofoam cups you might drink your morning coffee out of to the packaging required for shipping all the stuff that makes up a global economy — all these materials come from crude oil.
Even the machines that produce these products need fossil fuels for lubrication.
So in my view, it's just not feasible to think we can get rid of fossil fuels entirely and still maintain our current lifestyle.
Right now, the current Biden administration isn't too fond of the fossil fuel industry. They push for renewable energy, which is great in theory, but the reality is that wind and solar just can't meet all our energy needs right now.
On the other hand, the Trump administration was all about 'drill, baby, drill,' encouraging more fossil fuel production.
If we see a change in leadership and policies — specifically if Trump were to get back into office — we might see crude oil prices drop significantly, maybe even down to $30 a barrel. That would be down from a current price per barrel in the $80 range.
But that depends on a lot of factors, including how much we decide to pump.
So to sum it all up, the demand for fossil fuels is still there. People need power, especially with all the technology we rely on today.
While renewables are a crucial part of our future energy strategy, they are not going to replace fossil fuels entirely anytime soon. And they may never be replaced as far as the need for things like lubricants and plastics go.
So, when it comes to energy, we need to be realistic and understand that crude oil and fossil fuels will continue to play a significant role in our lives.
— Geof Smith
P.S. Oil might come down one day, but the gold surge is still on. Here’s the best way I see to play it.
| | | | |
|
|
No comments:
Post a Comment