Peak Gas In China
 

“Earlier this month, Chinese oil giant Sinopec made a surprise announcement that mostly flew under the radar. It's now expecting gasoline demand in China to peak this year, two years earlier than its previous outlooks.

The main culprit? The surging number of electric vehicles on the road.

As I've written previously, calling peaks is often a no-win endeavor for industry analysts.

The call will either be correct but seem obvious after the fact, or wrong and lead to years of mockery. But this isn't an analyst calling a peak; it's China's largest fuel distributor. Sinopec knows the fuel business, and more importantly, it has an interest in the business remaining robust. Saying it's all downhill from here for gasoline is quite a statement.”

This is extremely good news for future profit sharing and the air lines in general.

Electric cars are in the vertical part of the “S” curve.

The issue isn’t demand but supply. Even if global oil demand turned decreased over next few years(0% chance)the lack of investment in oil production will leave supply constrained and prices up. Now back to demand…India is growing fast, Indonesia is growing fast, Brazil is heading back to economic growth(with Petrobras signing long term contracts on every deepwater drill ship operator they can find). Global oil demand is set to rise in the face of constrained supply, OPEC+ Production cuts, and the Biden Administration out of SPR release wiggle room. Next couple years will be interesting.

Long Energy w/leverage

If by lack of production you mean refining capacity, you would be correct. There’s plenty of oil in the ground that we have access to, it’s the lack of ability to refine it that’s the choke point.

Agreed there is plenty of Oil. However to maintain or grow production requires capital investment which has been rather limited over the past view years due to ESG type rhetoric depressing Energy equities there companies did not reinvest back into the business due to poor return on capital. This puts pressure on supply as it will take a couple years for every dollar of capital investment today to materially increase supply.

It’s been greed plain and simple. Companies did not want to invest in their own infrastructure, in this case refineries. They put off heavy maintenance, not a new one built in decades. The big manufacturers are even off loading their refineries to other companies to get them off their books.

All of this has been happening long before ESG investing came along.

Will the EPA even let them build one? Or build one that is viable?

The EPA has been around for 50 years.

I don’t know, maybe build infrastructure that doesn’t cause rivers to catch on fire?

Yes refining capacity is a bottle neck, and those plants are specific to the type of product to be refined from the crude, and I think to a degree on the type of crude to be refined.

There's some nuance to plenty... it's not by grandad's standards, using OG production technology, we'd most likely be past peak oil already. A lot of the available reserves require advanced techniques and technology, which is only viable at a certain price point. We'll never see $20/bbl again, unless it's a temporary glut due to some big economic disruption.

That is true. There are only certain type of refineries that can deal with oil shale for example.

Yes, cheap extraction is not what it once was. The technology is there, the oil is there, it’s how much profit do the oil companies make. Our current fuel prices have more to do with international influences, I’m looking at you OPEC, than it does domestic policy.

So, if I follow your logic, companies that deem the return on their investment in new infrastructure to be cost prohibitive/risky (for a multitude of reasons) are to blame. Therefore, that constitutes greed on their part, plain and simple.

What about high school students that find the cost of college to be too high and decide not to "invest" in a college degree because the return on their investment is cost prohibitive/risky? Would the H.S. student be guilty of greed, plain and simple?