Why energy prices will remain high despite the global economic downturn
And the pandemic is the mother of all surprises, bringing about the biggest sustained change in demand since World War II. Prior to COVID-19, global oil demand was around 100 million bpd, but lockdowns (and fears) sent demand plummeting to 75 million bpd. Suppliers cannot collectively turn off the taps fast enough (slowing down flowing oil wells is no trivial task). On April 20, 2020, the price of oil fell to reduced $US37 per barrel, as storage facilities become overwhelmed and suppliers try to avoid dumping penalties. Investment in new oil and gas production had been weak before the pandemic, in part in response to global initiatives to steer economic development away from fossil fuels. The World Bank, for example, no longer finances fossil fuel exploration, including projects involving natural gas, a relatively clean energy source. Investment and environmental, social, and governance regulations reduce oil and gas projects’ access to finance, which is, of course, the point. It