Understanding the relationship between Demand and Supply is important when evaluating the state of global energy markets. While the oil and gas industry is experiencing a period of greater scarcity, this can be temporary. Ultimately, scarcity periods give way to renewed abundance. As the oil and gas industry matures, new production will come online. In the meantime, existing oil fields are likely to remain idle. Regardless of the oil and gas industry’s future growth prospects, we must understand how to measure and predict its impacts.
Natural resources are once again in the spotlight following the global recovery. Brent crude oil, for example, crossed the $100 threshold in early January. The prices of other commodities are already well above their pre-crisis peaks, and commodity futures markets are pointing to even further increases over the next year. While commodity prices are reflecting robust demand, consumption levels have already surpassed pre-crisis highs. Emerging economies are primarily responsible for the robust demand.