If, this time a year ago, someone told you the price of oil would be about $1 cheaper, you
probably would've been skeptical – doubtful, even. Since bottoming out at $36.91/barrel
during the Great Recession, crude oil steadily rose, regularly hovering between $80 and
$100/barrel. Of course that all changed in the second half of 2014 when oil plunged over 50 percent,
bottoming out just shy of $50/barrel, marking a change in the commodities market that caught virtually everyone off guard. Experts have yet to reach a consensus on whether oil will return to $100, but recent
events could give us some clues to its future price changes.

s access to an estimated two to four trillion barrels of oil (scientists are continuously updating this figure as research continues) that were otherwise inaccessible. To put that in perspective, Saudi Arabia's oil reserves are the second largest in the world (behind Venezuela), totaling 265 billion barrels in 2009. Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC), announced they would no longer cut their oil
production, leading to market over-saturation. Because global demand for oil was already weak to begin with, prices plummeted in a textbook case of supply versus demand.


Why Did Oil Fall in the First Place?

Over the past few years, engineers have utilized a new subterranean oil extraction technique that turns oil shale, a type of rock infused with organic
compounds deep in the Earth's crust, into fuel. This technology gave U.S. oil producers access to an estimated two to four trillion barrels of oil (scientists are continuously updating this figure as research continues) that were otherwise inaccessible. To put that in perspective, Saudi Arabia's oil reserves are the second largest in the world (behind Venezuela), totaling 265 billion barrels in 2009. Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC), announced they would no longer cut their oil
production, leading to market over-saturation. Because global demand for oil was already weak to begin with, prices plummeted in a textbook case of supply versus demand.

"We're never going to see $100 [oil] anymore"

Some analysts speculate that Saudi Arabia purposefully kept oil flowing to retain leverage in the oil space, reduce demand for renewable "green" energy, and to put pressure on the U.S. shale revolution. However, Prince Alwaleed bin Talal, member of the Saudi royal family and billionaire entrepreneur, told USA Today that he thought "the decision to not reduce production was prudent, smart and shrewd," but asserted that "Saudi Arabia and OPEC countries did not engineer the reduction in the price of
oil." But one of his statements further in the interview really put a damper on the fledgling oil recover: "I'm sure we're never going to see $100 anymore," he said in the January 2015 interview. "I said a year ago, the price of oil above $100 is artificial. It's
not correct." (For more, see: How Saudi Arabia Benefits From Low Oil Prices.)[/b]If, this time a year ago, someone told you the price of oil would be about $1 cheaper, you
probably would've been skeptical – doubtful, even. Since bottoming out at $36.91/barrel
during the Great Recession, crude oil steadily rose, regularly hovering between $80 and
$100/barrel. Of course that all changed in the second half of 2014 when oil plunged over 50 percent,
bottoming out just shy of $50/barrel, marking a change in the commodities market that caught virtually everyone off guard. Experts have yet to reach a consensus on whether oil will return to $100, but recent
events could give us some clues to its future price changes.

Why Did Oil Fall in the First Place?

Over the past few years, engineers have utilized a new subterranean oil extraction technique that turns oil shale, a type of rock infused with organic
compounds deep in the Earth's crust, into fuel.

This technology gave U.S. oil producers access to an estimated two to four trillion barrels of oil (scientists are continuously updating this figure as research continues) that were otherwise inaccessible. To put that in perspective, Saudi Arabia's oil reserves are the second largest in the world (behind Venezuela), totaling 265 billion barrels in 2009. Saudi Arabia, the de facto leader of the Organization of Petroleum Exporting Countries (OPEC), announced they would no longer cut their oil
production, leading to market over-saturation. Because global demand for oil was already weak to begin with, prices plummeted in a textbook case of supply


Tesla Motors (NASDAQ:TSLA) gets a lot of attention for its plan to build 500,000 electric
vehicles by 2020 and that will play a modest
role in reducing oil consumption.

But the fact
that automakers like Ford (NYSE:F) has been touting electric vehicles and autonomous
vehicles at CES in Las Vegas recently may be
even more important. CEO Mark Fields says
the company's EV and self-driving plans will
be aimed at the mass market, not just luxury
vehicles, which could help drive wide adoption of alternative fuel vehicles in a
decade or less.

There's also Toyota (NYSE: TM), which recently launched the hydrogen powered Mirai on a limited basis. Toyota would argue that
hydrogen is an even better source of energy than electricity EVs use because it's easier to fill your
car with hydrogen.


Adding to the plans of Tesla Motors, Ford and Toyota, tech companies like Google (NASDAQ: GOOG) putting over a million miles on autonomously driven vehicles and you have a level of
disruption to energy and transportation that we haven't seen in a century. OPEC has to be worried that tech companies and automakers are going to develop new products
that bypass oil to transport people, denting demand. Remember,

when oil dropped from $100 to
$35 per barrel it was because the market was oversupplied by about 1-2 million barrels per day,
which is less than 3% of demand everyday. Oil prices are extremely sensitive to demand changes
and OPEC can't afford to lose a significant number of customers to electric or hydrogen vehicles
or we could see prices decline even further than they did in 2015.

OPEC is in trouble and it knows it When you look at the macro trends above you begin to see that OPEC can't let oil jump to $100
per barrel. It risks allowing competitors like shale drillers to take share and it also kills demand for
oil. In addition, it has to cash in on oil while it can because companies like Tesla, Ford, Toyota, and
Google are building vehicle platforms that don't require oil as their base source of energy. OPEC is stuck between a rock and a hard place, forcing some very difficult decisions for the oil CARTEL.

Longer term:

I see new, cleaner technologies continuing to take share, slowly diminishing our need
for oil. Add it up and the days of $100 oil are behind us. That's good news or bad news, depending
on who you ask.


www.investopedia.com/articles/active-trading/061815/will-oil-ever-go-back-100.asp

www.fool.com/investing/general/2016/01/09/oil-prices-why-oil-may-never-hit-100-per-barrel-ag.aspx


Conclusion: I think that the days of oil boom is over.
I believe is high time Nigeria starts developing its Human capital.

NAwa o big fear dey