It’s time once again for our Annual Year In Review interviews! Last March 2020, Dr. Loren C. Scott, president, Loren Scott & Associates, gives his insight on what caused the OPEC fueled price drop over the past week. Dr. Scott also gives his opinion on why the reaction is what is it.
“…well what happened last week was OPEC was looking at oil prices softening because the coronavirus reducing the demand for oil out there. So they said what we need to do is we need to get the price back up, so what we need to do is to take even more oil off the market. And so Russia joined with us here and let’s get more oil off the market and keep the price up and Russia said no we’re not we’re not gonna do that we’re not gonna participate. And so the Saudis I think said, well we’re going to show you something here. So they took action to pump more oil on the market and discounts are all drive the price way to heck down and I think what they’re doing is they’re saying to the Russians we’re not kidding we want you to get to the table and we want to take all off the market and get the price up and if you don’t do this then look what’s happening to the price of oil now.
The Russians from their standpoint they’re saying we want to kill the shale industry in the United States and the only way to do that is we got to stop this thing about trying to prop up the price of oil just let it drop. Well, the problem now that Russia has is that they have two prevailing headwinds going against them on their gambit. One of the prevailing headwinds is the Saudis have now driven the price way down and that is dealing a body blow to the Russian revenues because economists would say the demand for oil is inelastic. What that means is when the price goes down your revenues go down quickly…”
The Chinese market and coronavirus are discussed in detail in regards to impacting energy prices. Dr. Scott explains why uncertainty and volatility are the market’s biggest issue.
Foreign companies investing in natural gas processing plants and pipelines are talked about with Lake Charles, the Bakken and Permian basin given as examples where foreign investing and ownership is talking place.
Natural Gas subsidies, flaring taxes and need for pipelines are also mentioned as issues and discussed solutions.
Dr. Scott gives the history of Earth Day and how wordsmithing has changed to fit the narrative of the time. He cites Global Cooling to Global Warming to Climate Change as one example of the framing and wordsmithing from the environmentalism industry.
Dr. Scott also answers the question what will the industry look like in five years.
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