A crisis is looming over the oil producers, with another oil crash forecast and this time, according to Bloomberg, among others, there may be no end in sight.
The potential for no recovery isn’t a distant future. It may happen as early as 2025, if electric vehicles begin flooding the market. Starting in 2014, the first serious dent in the oil market occurred with the over production of 2 million barrels – a number the market simply couldn’t support. Up until now, it’s been a flow on effect, with oil prices rising and falling like the tide.
Bloomberg’s Sooner Than You Think, an animated series that was just released, explores “some of the biggest transformations in human history that haven’t happened quiet yet.” One of the analyses covers the production of electric cars.
The production – which is now witnessing big companies pouring millions into manufacturing electric cars, has prompted closer examination. BMW and Nissan, along with Ford, are just some of the companies already investing in their future away from the oil industry. According to Tesla and Chevy, electric cars may be on the market within the next two years for around $30,000, with a 200-mile point A to point B distance.
But in OPEC’s ‘infinite’ wisdom, they still shrug at what they consider to be of little importance. Exxon’s forecast suggests only 1 percent of global car sales will represent electric cars – and that’s a forecast for 2040. “It always happens this time of the year,” Whiting Petroleum CEO Jim Volker had predicted, “… it’s kind of a decline in the driving market after the summer holidays.” Hmm, not really.
The free fall of oil prices is still ricocheting across the globe, with a price crash now forecast for coming months. It is possible that the price will fall to as low as $20 a barrel. If electric vehicles (EVs) make it onto the market in the coming 24 months, there’s no telling where the free fall will detonate. There’s one thing for sure, only a small percentage of EVs will be enough to cause an oil glut.
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