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Crude Oil Price Bullish Set-Up Will Accelerate Peak Oil Demand

Light Crude Oil Flashes a Major Bullish Signal on Yearly Time Scale

The anticipated bullish signal on the light crude oil price is now confirmed on the yearly close. The double hammer / tweezer bottom combination is a major reversal pattern that portends significant upside potential for the next few years. As such, the closest resistance area in the US$ 76-80 price area should easily be attained in the next two years.

2018-01-03_CrudeOilUTY

Light Crude Oil Full Future – Yearly Price Charrt

 

Inverse Relationship between Oil Price and Oil Demand Growth Rate

We also previously highlighted the inverse relationship between the oil price and the oil demand growth rate versus time:

2017-11-11_OilPrice and DemandGrowth

Inverse Relationship between Oil Demand Growth Rate and Inflation Adjusted Oil Price vs. Time

A better way to visualize this relationship is by plotting directly the oil annual demand growth rate vs. the annual oil price:

Oil Growth Rate vs. Price

Annual Oil Demand Growth Rate (%) vs. Annual Oil Price (USD)

Peak Oil Demand will be Confirmed in the Coming Years

Therefore higher oil prices in the coming few years will accelerate the development of competing technologies with oil and gas demand peaking as a source of primary energy in favor of solar and wind energy now at at a tipping point:

Energy Transitions – The New Paradigm Coming

and with electric vehicles to swamp the transportation market like an unstoppable  tsunami in the coming 10 years or less:

The future of cars is electric and it will happen much faster than expected

It is therefore our conviction that the expected oil price increase of the coming few years will accelerate peak oil demand that should become visible by the turn of the decade with the oil sector getting in the doldrums soon thereafter.

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