Despite recent fluctuations, oil prices remain relatively resilient. As energy markets continue to navigate uncertainty, experts are advised to maintain a cautious stance. Carolyn Kissane, associate dean of the NYU-School of Professional Studies Center for Global Affairs and founder of the SPS Energy, Climate Justice, and Sustainability Lab, shares her insights on why energy markets should still be on edge.
The global oil market has shown remarkable resilience in recent times, defying expectations of a sharp downturn. However, this trend is unlikely to continue indefinitely. Several factors contribute to the ongoing volatility in energy markets.
Climate change and increasing demand for low-carbon fuels are driving the shift towards cleaner energy sources. Governments worldwide are implementing policies aimed at reducing carbon emissions, which will inevitably impact oil consumption. Additionally, technological advancements in renewable energy have made it more competitive with fossil fuels.
Meanwhile, conflicts in key oil-producing regions, such as the Middle East and Africa, continue to pose a risk to global oil supplies. Geopolitical tensions and production disruptions can quickly disrupt markets, leading to price fluctuations.
In light of these factors, energy market participants should remain vigilant and prepared for potential shocks. While the resilience of oil prices is concerning, it does not necessarily mean that the crisis has passed. Instead, it highlights the need for sustained investment in renewable energy, smart energy policies, and robust risk management strategies.
Source: https://www.barrons.com/articles/oil-seems-resilient-why-energy-markets-should-still-be-on-edge-b351ba59