Released January 25, 2022 | SUGAR LAND
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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Debate over the rising price of commodities continues with the head of the International Energy Agency (IEA) saying the transition to a clean-energy future is not the cause of runaway inflation.
The price of West Texas Intermediate, the U.S. benchmark for the price of oil, is up more than 11% so far this year and flirting with a level not seen since late 2014. Retail gasoline prices, meanwhile, have been at multi-year highs for several months, bucking seasonal trends that would otherwise pull the price at the pump lower.
In Europe, meanwhile, the situation is far worse, with natural gas prices moving in response to Russian tensions with Western powers over Ukraine.
Analysts at London oil broker PVM said in a Monday newsletter that energy-related inflation, particularly for oil, "risks wreaking havoc" on the global economy.
The sharp economic recovery from 2020-2021 caught much of the market on its backfoot, with orders overwhelming the supply chain for a myriad of consumer goods. The circumstances are no different for oil or natural gas, though an investor focus on renewables means many producers are shying away from new developments for fossil fuels.
Fatih Birol, the head of the IEA, said it is wrong, however, to lay the blame squarely at the foot of the energy transition. The agency said that, apart from the global economic recovery, there is an artificial tightness in the market caused in part by geopolitical issues.
Recent spikes in commodity prices were attributed to conflict in Libya, protests in Kazakhstan, bombings in the United Arab Emirates and ongoing tensions in Eastern Europe. For some ministers at OPEC, meanwhile, it is, contrary to Birol's sentiment, the pursuit of things other than fossil fuels that is behind some of the market shortages.
The IEA said "the way out of this impasse is much stronger investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power."
Though gas in particular will remain an essential component of the energy sector, Europe in particular needs to diversify its sources of supply and build up its natural gas storage, the IEA said.
And while the headline focus on the possibility of war over Ukraine puts the European energy market at the forefront of the conversation, the U.S. economy has its own issues too. From London, PVM has been monitoring White House efforts to control higher oil and gasoline prices, but from a federal policy standpoint, it's "toolbox is effectively empty."
Unlike OPEC, the U.S. market is a free one, and energy companies will do what they must to return value to shareholders. For the American Petroleum Institute (API) (Washington, D.C.), that means an all-of-the-above energy policy that keeps fossil fuels flowing while also chasing everything from liquefied natural gas to carbon capture and storage.
President Joe Biden himself has acknowledged the transition to a cleaner future won't happen overnight, and even with the U.S. as a world leader in oil and gas production, the API said emissions are moving lower -- in the direction that they should be.
API President and Chief Executive Officer Mike Sommers said recently that, regardless of whether the focus is on oil, wind or solar, all players in the energy sector are working to address "this generation's biggest challenge: providing increasing amounts of energy to a growing global population while reducing emissions and decreasing industrial impact on the environment."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
The price of West Texas Intermediate, the U.S. benchmark for the price of oil, is up more than 11% so far this year and flirting with a level not seen since late 2014. Retail gasoline prices, meanwhile, have been at multi-year highs for several months, bucking seasonal trends that would otherwise pull the price at the pump lower.
In Europe, meanwhile, the situation is far worse, with natural gas prices moving in response to Russian tensions with Western powers over Ukraine.
Analysts at London oil broker PVM said in a Monday newsletter that energy-related inflation, particularly for oil, "risks wreaking havoc" on the global economy.
The sharp economic recovery from 2020-2021 caught much of the market on its backfoot, with orders overwhelming the supply chain for a myriad of consumer goods. The circumstances are no different for oil or natural gas, though an investor focus on renewables means many producers are shying away from new developments for fossil fuels.
Fatih Birol, the head of the IEA, said it is wrong, however, to lay the blame squarely at the foot of the energy transition. The agency said that, apart from the global economic recovery, there is an artificial tightness in the market caused in part by geopolitical issues.
Recent spikes in commodity prices were attributed to conflict in Libya, protests in Kazakhstan, bombings in the United Arab Emirates and ongoing tensions in Eastern Europe. For some ministers at OPEC, meanwhile, it is, contrary to Birol's sentiment, the pursuit of things other than fossil fuels that is behind some of the market shortages.
The IEA said "the way out of this impasse is much stronger investment in low-carbon energy technologies including renewables, energy efficiency and nuclear power."
Though gas in particular will remain an essential component of the energy sector, Europe in particular needs to diversify its sources of supply and build up its natural gas storage, the IEA said.
And while the headline focus on the possibility of war over Ukraine puts the European energy market at the forefront of the conversation, the U.S. economy has its own issues too. From London, PVM has been monitoring White House efforts to control higher oil and gasoline prices, but from a federal policy standpoint, it's "toolbox is effectively empty."
Unlike OPEC, the U.S. market is a free one, and energy companies will do what they must to return value to shareholders. For the American Petroleum Institute (API) (Washington, D.C.), that means an all-of-the-above energy policy that keeps fossil fuels flowing while also chasing everything from liquefied natural gas to carbon capture and storage.
President Joe Biden himself has acknowledged the transition to a cleaner future won't happen overnight, and even with the U.S. as a world leader in oil and gas production, the API said emissions are moving lower -- in the direction that they should be.
API President and Chief Executive Officer Mike Sommers said recently that, regardless of whether the focus is on oil, wind or solar, all players in the energy sector are working to address "this generation's biggest challenge: providing increasing amounts of energy to a growing global population while reducing emissions and decreasing industrial impact on the environment."
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
