“In 2023, for the first time, investment in solar energy is expected to beat out investment in oil production. It’s a stark difference from what the picture looked like a decade ago, when oil spending outpaced solar spending by nearly six to one.”
“Permanent refinery closures since the start of 2019 reduced global capacity by around 4.7mn barrels per day, Barclays estimates, and new refinery capacity such as at Kuwait’s Al Zour can’t be brought quick enough. As a result, US and European refinery gross margins are least four times the long-run average“
Before shale took off oil to gas prices averaged 8 to 1 – close to their energy equivalence ratio.
Since 2013 this ratio has averaged 20 to 1.
Outside of North America the ratio is 3 to 1.
“In other words, US gas is priced at an energy-equivalent discount of 56% to world oil and a 77% discount to world gas. In our 35 years investing in global energy markets, we have never seen such a wide disparity.“
Source (including arguments on why it might revert).
Once adjusted for both inflation and the big increase in fuel economy, the real price of gasoline per mile driven in the US is far from the all time records seen by the nominal price.
“Despite record 1Q 2022 results and continued capital discipline, the disconnect between the energy sector weighting in the MSCI Wold Index relative to the oil market value is at its widest level since 2000“.
