U.S. crude climbed to $71.48 a barrel on Monday as oil projects falter and money managers plan to instead pour trillions of dollars into renewable energy programs.
- Monday’s price is the highest in over two and a half years and is double the level recorded in October.
- Analysts believe production will have a difficulty in catching up to demand which will continue to increase until 2026.
- Oil extraction expenditures were slashed by more than half to $330 billion in 2020 versus 2014. A modest rise is expected in the coming years.
- Analysts expect a price surge as travel recovers from the lockdowns. A steady increase until 2022 could result in a supply shortfall.
- The transition to clean energy is in preliminary stages, making investors bullish on the industry.
- Major producers are working to limit environmental damages and boost the mix of renewable energy in their portfolios.