One of London’s oldest and most respected financial institutions projects “catastrophic consequences” if businesses fail to prepare for the phenomenon called peak oil. Along with the Royal Institute of International Affairs, also called Chatham House, Lloyd’s of London issued a white paper entitled “Sustainable energy security: strategic risks and opportunities for business.”
In the white paper, the group warns that businesses need to prepare for a spike in the price of oil, as a result of a global supply crunch. Growing economies, particularly in Asia, will continue their rapid increase in oil consumption just as supplies begin to “peak” around the world.
The report depicts a shocking scenario where oil gets as expensive as $200 per barrel, or even higher, as rising demand hits falling supply. Crude oil futures could triple from their current levels relatively rapidly.
That oil will eventually peak is undeniable – the only question is when. There are, by definition, limited supplies of non-renewable fuels like oil, and most of the world’s transportation and agricultural infrastructure now depend on petroleum fuels.
The prices of food will likely also spike with the price of oil, reflecting the higher cost of that key input.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.