A Recent Investment History of Oil
Why The Price Of The Commodity Once Known As “Black Gold” Went Negative A Few Weeks Ago
As recently as a dozen years ago, the average person had it in their head that the world was running out of oil. This idea even had a catchy name — Peak Oil, which stated that at some not too distant point in the future, the world would run out of cheap-to-produce oil. Coupled with growing demand from both developed and emerging markets, the increased cost to extract crude oil (from exotic places like deep beneath the Arctic Ocean) would result in higher and higher prices. The ultimate result would be significant diversification away from oil into other alternative sources of energy like solar and wind as well as lower and lower oil production (as various countries worked to break their addiction to super expensive oil).
And things unfolded according to the Peak Oil story for a while. Countries like China and India massively increased their oil consumption as their economies caught up to the developing world. Exxon Mobil and Chevron invested billions and billions of dollars in exotic offshore oil projects and oil sands projects that were only economical with oil at $120. All this created an epic boom in oil prices from the early 2000s through 2008. I distinctly remember how the price of a gallon of regular gasoline…
