Are you sure you aren’t underestimating the huge volume of demand that needs to be destroyed? I believe something like 20%-25% of demand needs to be destroyed, in both the crude and LNG markets.
The last time demand was 20% lower than baseline was during the two worst months of Covid, when the majority of people were staying inside their home
So the question is: how high does the price of oil have to get in order to force people to consume like they did under the worst of Covid?
I’m no economist, but my gut feeling says it will be sustained significantly higher than $160/barrel.
Industrial activity was still up during covid though, with all the shortages and everything most manufacturers were still running flat out. This demand destruction would be at the very base of consumption, not driven from the top consumer.
Are you sure you aren’t underestimating the huge volume of demand that needs to be destroyed? I believe something like 20%-25% of demand needs to be destroyed, in both the crude and LNG markets.
The last time demand was 20% lower than baseline was during the two worst months of Covid, when the majority of people were staying inside their home
So the question is: how high does the price of oil have to get in order to force people to consume like they did under the worst of Covid?
I’m no economist, but my gut feeling says it will be sustained significantly higher than $160/barrel.
Industrial activity was still up during covid though, with all the shortages and everything most manufacturers were still running flat out. This demand destruction would be at the very base of consumption, not driven from the top consumer.