You can’t throw out oil if you don’t have something that can replace it, and we don’t. From Jude Clemente at realclearpolitics.com:
Let’s start with the obvious: Oil is the world’s most important fuel, supplying 35% of all energy and over 95% of transportation needs. More than 6,000 everyday products contain oil as their core ingredient. Simply put, oil has no significant substitute, and it won’t for a long time. Massive amounts of wind and solar won’t displace “black gold” because these sources compete only in the power-generating sector, where oil effectively plays no role.
Most Americans probably don’t realize that electricity already lost the transportation race to oil and its powerful derivative – gasoline – 120 years ago. In 1900, nearly 40% of U.S. cars were electric. Today, less than 1% of cars run on electric power (1.8 million out of 270 million). Despite the huge subsidies thrown at the industry over the past 10 years, electric vehicles largely remain “toys for the rich.”
As the world’s economies rebound from COVID-19 and travel inevitably picks up, the need for more oil is becoming even more pressing. After the oil industry set a global-demand record in 2019 at 101 million barrels per day, the pandemic plunged demand to 92 million b/d in 2020. The Department of Energy, however, has just forecast that consumption will rise to 98 million b/d this year and above 101 million b/d in 2022.
Not even a price surge has slowed the need for a fuel embedded in just about everything we do: Oil prices just saw their best first half since 2009 (see below). In recent months, oil companies have had the best run of any sector in the S&P 500. Investors that bet against, or pulled out of, U.S. oil fund USO (NYSEARCA:USO) have been burned. The popular oil Exchange Traded Fund nearly doubled in value since October last year, and others such as DBO, BNO, and USL are once again making for sound investments.
STRAIGHT LINE LOGIC 