Excellent, I agree with many, perhaps all of your points.
AI is also accelerating the demand for energy, especially natural gas, and also resources such as water. We build data centers, but do nothing towards building a more efficient and reliant power grid and the necessary infrastructure.
Lastly, you are extremely blessed to have your parents around. I hope they will continue to stay well for a long time and be a joy for you and your family.
Great note Arjun. Love the videos but the written word rocks for insomniacs (with a sleeping wife who would not want to be woken up by your rock classical intro music!). Hope all well. R
Thanks for a good read, Arjun. The dichotomy between the two forecasting groups is interesting and not something I'd thought about. I think the time is coming when U.S. shale passes the "growth baton" to some other supply source. Not sure what/where. The layoffs happening now are paring away muscle mass from an already diminished industry, that if the present trend continues will no longer have the critical mass to respond to a big increase in demand. Companies-other than CVX and XOM, are in effect telling us they are no longer going to fund expansion. I suspect it would take an oil shock-supply interruption on a massive scale to change this. The OPEC report showing demand of 126 MBPOD in 2050 would be one such event. In my view this dislocation will be triggered well in advance of 2050 in the OPEC scenario. Any thoughts on this bit of rambling? Cheers
Dave, Thanks for your comment. What strikes as the difference between the currrent period of poor sector sentiment and prior ones is that the outlook for demand is being questioned. That was never the case before...it was almost always just about too much supply and how long that would last. I just don't get the idea that oil demand will permanently plateau or even decline any time soon. And yes, it will most likely take a more sustained price/profitability increase to spark higher CAPEX and a return to wanting to grow.
Interesting post as always. One question though; isn't the obvious reason why OPEC research is given less weight that there is frankly quite an obvious conflict of interest? One should certainly be wary of a forecast when the forecaster’s future depends on it coming true.
No forecaster is free of any bias. The IEA, which historically was there to support OECD consumming countries, was often more bearish. The oil companies have faced extreme ESG/climate pressure in recent years that I think has skewed their forecasts. In the old days, the sell-side was accused of always being bullish to support banking clients. The OPEC Research people I've met are impressive and I'd say so far their forecasts are tracking better than others. But yes, they too have a book to talk.
Hey thanks for this post! I have not read anything from your substack in a while. I agree re demand but would point out that Goering and Rosenzwaig have also been skeptical about the idea of peak demand. So good that you were able to retire for a while and be a stay at home dad! I did that for a little bit when my older davghter was little. Every dad should know how hard being a househusband is! 😁 have a great weekend!!!
Great to hear from BigOinSeattle. Yes, I get the G&R posts they put out quarterly and we definitely share some themes, in particular on demand. and 100% on being a stay at home Dad/househusband!!!
What’s your take on the Ember report?
https://www.nytimes.com/2025/09/08/climate/china-clean-energy-fossil-fuel-research.html
Excellent, I agree with many, perhaps all of your points.
AI is also accelerating the demand for energy, especially natural gas, and also resources such as water. We build data centers, but do nothing towards building a more efficient and reliant power grid and the necessary infrastructure.
Lastly, you are extremely blessed to have your parents around. I hope they will continue to stay well for a long time and be a joy for you and your family.
thank you M.O.S.!
Great note Arjun. Love the videos but the written word rocks for insomniacs (with a sleeping wife who would not want to be woken up by your rock classical intro music!). Hope all well. R
Thank you Rupert! I prefer writing though enjoy doing both.
Thanks for a good read, Arjun. The dichotomy between the two forecasting groups is interesting and not something I'd thought about. I think the time is coming when U.S. shale passes the "growth baton" to some other supply source. Not sure what/where. The layoffs happening now are paring away muscle mass from an already diminished industry, that if the present trend continues will no longer have the critical mass to respond to a big increase in demand. Companies-other than CVX and XOM, are in effect telling us they are no longer going to fund expansion. I suspect it would take an oil shock-supply interruption on a massive scale to change this. The OPEC report showing demand of 126 MBPOD in 2050 would be one such event. In my view this dislocation will be triggered well in advance of 2050 in the OPEC scenario. Any thoughts on this bit of rambling? Cheers
Dave, Thanks for your comment. What strikes as the difference between the currrent period of poor sector sentiment and prior ones is that the outlook for demand is being questioned. That was never the case before...it was almost always just about too much supply and how long that would last. I just don't get the idea that oil demand will permanently plateau or even decline any time soon. And yes, it will most likely take a more sustained price/profitability increase to spark higher CAPEX and a return to wanting to grow.
The IEA has a clear climate change, net zero bias. I would not trust anything they publish. They clearly have an agenda
My understanding is that is a very recent phenomenon.
Interesting post as always. One question though; isn't the obvious reason why OPEC research is given less weight that there is frankly quite an obvious conflict of interest? One should certainly be wary of a forecast when the forecaster’s future depends on it coming true.
No forecaster is free of any bias. The IEA, which historically was there to support OECD consumming countries, was often more bearish. The oil companies have faced extreme ESG/climate pressure in recent years that I think has skewed their forecasts. In the old days, the sell-side was accused of always being bullish to support banking clients. The OPEC Research people I've met are impressive and I'd say so far their forecasts are tracking better than others. But yes, they too have a book to talk.
Hey thanks for this post! I have not read anything from your substack in a while. I agree re demand but would point out that Goering and Rosenzwaig have also been skeptical about the idea of peak demand. So good that you were able to retire for a while and be a stay at home dad! I did that for a little bit when my older davghter was little. Every dad should know how hard being a househusband is! 😁 have a great weekend!!!
Great to hear from BigOinSeattle. Yes, I get the G&R posts they put out quarterly and we definitely share some themes, in particular on demand. and 100% on being a stay at home Dad/househusband!!!