Evaluating The Shape Of The Energy Markets

With the way the energy markets are changing almost on a monthly basis, gleaning useful information to guide investment strategy becomes an increasingly tricky proposition. The world has entered a somewhat volatile time of transition in terms of energy. Supply issues, environmental concerns, the growing world climate change crisis, and the appearance of new technologies revolutionizing energy production and storage has thrown a lot of the cozy assumptions investors have relied upon for decades into the junkheap.

For example, coal has crashed on the world market. At one time the dominant fuel source for electricity generation, coal has become increasingly unattractive both as a fuel and an investment opportunity. The proliferation of cheap natural gas has undermined coal price-wise. The environmental degradation wreaked by this dirty fuel has also prompted a growing drive to phase out coal worldwide. China recently canceled orders for 100 new coal electrical plants because the air in their major cities has become all but unbreathable. Australia and other countries are also phasing out coal by issuing no new licenses for plant construction. All these factors have combined to collapse the world coal market and indications are that the prices won’t be coming back up ever. That has made coal a losing bet investment-wise. Meanwhile, solar and other renewable energy technologies are expanding their penetration into world energy markets and reaching grid-parity with fossil fuels. The result here is that investment bets in these technologies are becoming more attractive every year.

And then there’s oil. At one time, oil prices had hit a peak in the commodities exchanges, reaching $120 per barrel and higher at times. The Global Financial Meltdown reversed that trend sharply downward, and with the development of new technologies making shale oil extraction economically feasible, prices remained depressed through the decade. Now, a stabilization in supply and certain manipulations by international banks are causing oil to creep upward again. But in the long term, the picture for oil is by no means certain. Alternative fuels and technology again will be impacting demand in ways the oil conglomerates and major petro-states will not be able to control.

The details from this page can help investors gain a better picture of the changing energy market and how to plan one’s investments to yield a maximum return. Check out the various articles available. Detailed information now will help guarantee successful investment over the long haul.