DrWily @DrWily: "- 𝙒𝙝𝙮 𝙄𝙨 𝙊𝙞𝙡 𝙎𝙤..."

Netherlands

- 𝙒𝙝𝙮 𝙄𝙨 𝙊𝙞𝙡 𝙎𝙤 𝘾𝙝𝙚𝙖𝙥? - Now even though I am not an energy commodity expert I can see that oil prices aren't doing well. After the big peak of 2022, it has only gone down, struggling to make a new high even though many OPEC members are keeping production low. So why is black gold struggling to go higher? Well, the answer is quite simple, so let’s look into it! - 𝙊𝙋𝙀𝘾 𝙄𝙨 𝙇𝙚𝙨𝙨 𝙄𝙢𝙥𝙤𝙧𝙩𝙖𝙣𝙩 - As most of us know the oil market is heavily manipulated and for years a group of countries known as OPEC decided what happened in the energy market. But throughout the years their power has dwindled and at the moment they don't decide what happens anymore, and thats because America is king now. After 2008 the USA increased production dramatically and at this point, they are responsible for almost 20% of the world's production. And even if we look at other nations like Canada and Brazil we can see that they have also become big players in the world of oil. This is one reason why OPEC is less important and to be honest they haven't cut production that much even. The drop we saw during the 1970s was much bigger than what we are witnessing now. Meanwhile, many other nations significantly increased production, so OPEC has a lot less influence on the oil market. Sources: ourworldindata.org/grapher/oil-production-by-country?country=USA~CAN~BRA~OPEC+%28EI%29 www.worldometers.info/oil/oil-production-by-country/ - 𝙊𝙞𝙡 𝙄𝙨 𝙇𝙤𝙨𝙞𝙣𝙜 𝙏𝙤 𝙍𝙚𝙣𝙚𝙬𝙖𝙗𝙡𝙚𝙨 - Aside from OPEC being less scary, there is another reason why oil prices are so low and struggle to move higher, renewables. If we look at oil consumption we can see that growth has slowed down immensely. Oil consumption grew 87% from 1965 to 1985, meanwhile, consumption grew only 22.5% from 2003 to 2023 which is 74% lower. This already shows that oil is out of fashion, however, if we look at the growth in renewables we see the complete opposite. Renewable electricity generation grew by 209% from 2003 to 2023 so in many ways it's stealing the spotlight from oil and other fossil fuels. Meanwhile, electric cars were unheard of in 2003, but in 2023 they accounted for 18% of all new cars sold worldwide. All of this is lowering oil demand but this isn't even all. In general, we have also become more efficient with energy use per person remaining flat or going down in a lot of places in the world. Source: ourworldindata.org/grapher/per-capita-energy-use ourworldindata.org/electric-car-sales ourworldindata.org/renewable-energy ourworldindata.org/grapher/oil-consumption-by-country - 𝘾𝙤𝙣𝙘𝙡𝙪𝙨𝙞𝙤𝙣 - Overall we can see that the age of fossil fuels is ending, sure we will continue to use them for some time but they are being replaced at a rapid pace. We are moving to electric cars, more and more energy is coming from renewables, and we also become more power efficient. Meanwhile, the oil cartel known as OPEC has lost a significant amount of power making their supply cuts less effective and the biggest players are increasing production as much as possible. So I expect oil and other energy commodities to lose relevance and value over time, while renewables will continue to win. Especially as the production cost of both solar and wind continues to fall. Sources: ourworldindata.org/grapher/levelized-cost-of-energy If you liked this short post, FOLLOW my profile for more; if you agree with my investing philosophy, COPY my portfolio to join the ride! My Performance speaks for itself! ✅ +14% so far this year! ✅ +55% In 2023! ✅ Well-diversified portfolio! ✅ Long-term mindset! ✅ Low-risk score of only 4! So be sure to COPY my portfolio for great results! $OIL $EuroOIL $TAN $SPX500 $NATGAS

4 Mentioned

OIL

TAN

Invesco Solar ETF

SPX500

NATGAS