The oil markets have witnessed a lot lately primarily because of the global macroeconomic factors. Earlier, the market players were worried that the oil prices would be witnessing strong uptrend because of the sanctions on Iran imposed by the United States. During that time, there were concerns of lower supply and increased demand for the oil which could shoot up the prices. However, later on, the situation got reversed after the US granted waivers to certain countries from the Iran sanctions. These countries were allowed to buy oil from Iran.
Moreover, because of the unfavourable global macro factors, the concerns about the economic slowdown also started to weigh over the minds of the market players which raised questions over the demand for oil. As a result, the prices started to witness a decline. However, the oil prices witnessed some stability because of Saudi Arabia’s announcement to reduce the supply of oil. The oil traders are in the dicey position, and they need to analyze the global macro trends and factors which could impact the oil prices.
On November 13, 2018, International Energy Agency or IEA stated some views regarding the oil prices. According to them, if there is any divergence between robust growth in the consumption as well as a lower investment towards the new supply and regular checking is not being done, the oil prices would be encountering negative impacts. The report by IEA also threw some light on the increasing electrification of the world and also highlighted the role played by the wind as well as solar. The role of coal as the power source might get flattened moving forward. The demand for coal is expected to be largely replaced by the new wind as well as solar projects combination. The International Energy Agency is of the view that after the completion of coal plant projects which are currently under construction phase, the flow with respect to the new coal projects is expected to slow after 2020.
Australia is expected to remain the largest exporter of coal in the world, and there are expectations that the country would increase the production levels because it takes advantage of high coal demand for the power from South East Asia as well as India. The report by IEA also reflected the capacity of Australia to be the leader in regard to the hydrogen technology with the help of wind and solar power combination. The Federal Energy Minister named Angus Taylor reflected positive views with respect to the demand of the global energy. According to him, Australia is in a robust position to reap the benefits.
Even though a shift towards the technology which helps in lower emissions was witnessed, the key personnel of IEA also raised concerns regarding the global energy-related carbon dioxide emissions. These emissions are expected to witness a rise moving forward. According to him, the world has still not met the environmental objectives in regard to air quality as well as climate.
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