Oil’s Future: The Implications of Demand and Technology

Published on
January 29th, 2018
24 minutes

Super-Intelligent Machines – The Ultimate Challenge for Humanity

Oil’s Future: The Implications of Demand and Technology

The Expert View ·
Featuring Daniel Lacalle

Published on: January 29th, 2018 • Duration: 24 minutes

Daniel Lacalle, Chief Economist at Tressis Gestion SGIIC takes us on quick-fire tour of the global oil market in which OPEC is fighting a losing battle with the forces of technological change and energy efficiency. Cheap, easy money and excess capital drove the demand dynamics of a higher oil price, but the transitory factors of synchronized global growth will be short lived. The geopolitics of oil will diminish with oil's declining importance within the global energy matrix.


  • WM
    Will M.
    1 February 2018 @ 19:38
    Overall a good presentation and some good points made. I do wonder why the link between lower prices and shale oil / multilateral drilling was not more exposed. The cap on the price will also be impacted by increased shale oil production which will be very attractive (especially in the US) at prices much above $60. I have been in the oil business for 40 years and back in the late seventies the prediction (with near certainty) was for $100 oil by 1990. By 2000 the view was oil would never get much above $30 - 40 in the next 10 years. By 2010 we were at Peak Oil and calamity was just around the corner...... Suffice to say oil price prediction has little basis for certainty beyond a few quarters out. Oil will likely become of less consequence as we go into the future but it won't go away as a strategic resource. Additionally a few on the worlds biggest oil field and many of the oil provinces have peaked in production. At some point the new discoveries will simply not keep pace with anything like current demand. So there will be a Peak oil and its timing will be determined by price not driven by EVs or the Chinese. From my experience in the business it feels like we could easily see $30 again BUT I would be willing to take a long term bet that some day in my lifetime I will certainly see $150 oil.
  • CS
    Christo S.
    29 January 2018 @ 21:36
    Have stopped listening after a few minutes. It makes no sence to listen to an economist who talks about oil.
    • RM
      Robert M.
      29 January 2018 @ 21:50
      Oil supply is slow moving in response to price. Demand is fast. Demand also directly impacts the denominator (USD). Demand is therefore most of the puzzle of oil forecasting. Demand is aligned with the business cycle and its proxies such as ISM mfg (ie: the province of economists).
    • JC
      Ja C.
      30 January 2018 @ 22:27
      Christo, when does it ever make sense to listen to an economist?
    • OP
      Oscar P.
      31 January 2018 @ 23:31
      He has worked eleven years in Repsol and a couple of years more in energy companies.
  • GF
    Gordon F.
    29 January 2018 @ 16:17
    I like these interviews, but it annoys me that I have to look at the screen to see the questions, as I just generally listen to them (I don't need to give a talking head full visual attention). Could you PLEASE have someone with a distinctly different voice ask the questions so I don't have to keep looking back to the screen, or simply having to guess what the question was by the speaker's comments. Often, by the time I realize that the brief silence indicates another question has been flashed to the screen, it is already gone.
    • JL
      J L.
      29 January 2018 @ 16:28
      plus some people just listen to the audio
    • EF
      Eric F.
      30 January 2018 @ 01:37
      Totally, totally agree and have suggested to RV that maybe expert just simply states the question before answering it. I listen to probably 90% of content but will watch content with multiple speakers / more documentary format. Raoul replied to similar comments recently statIng about 80% of views were video so I understand why this isn’t a priority for them. However, I’d argue they position themselves as video first but would get more engagement and retention if audio was better promoted. Very little of the content suffers from an audio only experience. I wonder also if they feel this starts a path to radio when TV is their focus?
    • tW
      tgwtom W.
      31 January 2018 @ 21:43
      Not trolling. This format is perfectly fine, eminently listenable, not unpleasing nor unusual, and somewhat cinematic. Carry on:)
  • RA
    Robert A.
    31 January 2018 @ 18:25
    Thought this was an excellent overview on Oil and found it to be quite helpful. I know this may be at odds with some other comments re the questions appearing on the screen, but I really like the presentation this way as it saves time from the camera having to go back and forth to the questioner. I listen to a lot of Podcasts, but have always enjoyed watching the RV segements.
  • DM
    Dan M.
    31 January 2018 @ 03:37
    Don't understand how China moving to a consumer economy is going to substantially reduce global oil demand. Global population growth and growing wealth in developing countries are going to require that the industrialization continues somewhere. We can't all just be consumers-somebody has to make it.
    • DM
      Dan M.
      31 January 2018 @ 03:42
      Edit: I meant service economy above, not consumer economy.
  • js
    jacob s.
    29 January 2018 @ 11:28
    Drop off 450,000 barrels a day? Ok...at that rate that's 1,642,500,000 over the next 10 years...the world consumes 30,000,000,000 barrels per year. Oil's not going anywhere.
    • DM
      Dan M.
      31 January 2018 @ 03:30
      Agree - demand is expected to be 36 billion barrels this year and has been increasing by more than 1%/year.
  • KF
    Kenneth F.
    30 January 2018 @ 02:53
    No Mention of the record inventory draw downs? Only monetary policy driven? or is OPEC responsible for the draw down?
  • AC
    Andrew C.
    30 January 2018 @ 01:54
    Oil is being pushed out of the transportation sector and is being replaced by electricity. Okay (?), but where is the base-load electricity coming from?
  • RM
    Robert M.
    29 January 2018 @ 22:57
    The point about efficiency taking 240 thousand bbls off the market and future technology (EVs) making oil price falls permanent is countered by Jevons paradox. Those efficiencies will make oil cheaper however that cheapness will restimulate demand for oil.
  • MB
    Matthias B.
    29 January 2018 @ 19:55
    I would disagree with his statement that monetary policy basically drove the cycle after 2004; it was the demand from China and the strong urbanisation/industrialisation trend, at least for base metal
    • RM
      Robert M.
      29 January 2018 @ 21:13
      Yeah there is much more to it and China is at least half. The Afghan and Iraq wars started the dxy falls and Bushs tax cuts helped it down (mkt looked ahead to the coming budget deficits). The Greenspan MP drove the housing boom via low for longer rates which hurt the trade deficit thus forcing dxy down also. China boomed on the US trade deficit (and supported it via their buying of USTs which kept 10yr rates lower). The lower dxy meant a lower RMB (peg) which helped their exports to ROW. So Chinese production boomed and US consumption boomed. That drove demand for oil (CL price rallied). DXY fell hard thus impelling CL/USD up.
  • RS
    Ryan S.
    29 January 2018 @ 20:14
  • MB
    Matthias B.
    29 January 2018 @ 20:03
    but otherwise a pretty concise delivery and message.
  • KB
    K B.
    29 January 2018 @ 19:52
    I would rather hear an industry insider like Art Berman talk about oil than an economist who doesn't focus explicitly on oil.
  • JC
    John C.
    29 January 2018 @ 18:17
    Good interview. Nice overview of the oil patch which was easy to understand and to see where we might go from here on out.
  • LK
    Lyle K.
    29 January 2018 @ 15:27
    Two thumbs up for Daniel Lacalle, always like to see him on RV his $LMT call was a good one!
  • MG
    Mohamed G.
    29 January 2018 @ 13:53
    Good interview
  • PU
    Peter U.
    29 January 2018 @ 13:22
    very solid presentation