Investors are also driving up prices. Not too long ago oil was a commodity that traded principally on the actual or the anticipated forces of supply and demand. However, new strategies are increasingly driving investments in petrochemicals which are designed to cash in on the economic recovery. (The simple logic being that coming out of recession the demand for oil will increase as the economy improves.)
Increased supply will also put downward pressure on oil prices in 2013. Although this increased production will be offset by increased consumption, particularly in the developing world.
The faster that renewables can be price competitive with oil the sooner we can leverage the markets to wean ourselves off of dirty sources of energy.
© 2013, Richard Matthews. All rights reserved.