financialsense.com / ROBERT RAPIER via consumerenergyreport.com / 12/28/2015
As I have done for several years now, I like to close out the year by highlighting the top stories in the energy sector.
The 2015 list was challenging, because so many of the stories are interrelated. Commodity prices continued to plummet, but oil, natural gas, and coal prices fell for somewhat different reasons. This of course resulted in the lowest gasoline prices in years, which was itself a big story.
A crude oil export ban that I believed would stick around for years was repealed, yet it’s part of a spending bill that also extended tax credits for renewable energy. So is the story the spending bill, or its particular provisions? These were the challenges I had to sort out.
The rankings are somewhat arbitrary. This year there wasn’t an energy news event as dramatic as the Deepwater Horizon oil spill of 2010, or the Fukushima Daiichi nuclear disaster of 2011. Here is the list I settled on.
1. The oil plunge continues
My top energy story of 2014 was the price collapse that took West Texas Intermediate from more than $100 per barrel at the end of July to just over $50/bbl by the end of the year. This year saw a brief recovery above $60/bbl, but production increases in the Mideast, combined with a slower-than-expected decline in U.S. shale oil output, led to rising crude inventories worldwide. This continued to put downward pressure on the price, which is now closing out 2015 in the $30s.
The reason this is the top story is that it was a major story all year long, with impacts on so many people and countries. It has been said that OPEC’s decision to defend its market share cost members of the oil exporters’ club $500 billion in 2015. That $500 billion ended up in the pockets of consumers by way of lower gasoline prices, cheaper airline tickets, etc.