Energy Futures

"Context"

World oil demand is growing faster than it has for a quarter-century. Profits are rising in tandem with worries about their economic implications. Rising oil demand can affect economic growth in producing and consuming countries, inflation, business models, market and regulatory developments, and oil exploration and production.

Current real prices for crude oil have not yet come close to 1970s levels, yet prices may not be stable. The International Energy Agency (IEA) expects dramatic growth in oil consumption through 2030. Statistically, these forecasts depend on anticipated population growth and expanded production. Even if technological progress reduces the world economy's energy intensity, people will still need roughly twice the amount of energy now being consumed. If prices remain high or increase, the industry is likely to make more efforts to develop oil substitutes. However, producers may be unable to increase the oil supply significantly. Some countries are finding it difficult even to maintain their present levels of production. Countries with oil resources have many options. They can court the right kind of oil companies, rely on their own resources...