Welcome to the New World Energy Order

Welcome to the new world energy order. It hopes you enjoy your stay. 

With the prospect of China finally reopening its doors to the world, the market is finding it harder and harder to be bearish on oil. 

Just think, yesterday oil was trading 2% higher despite the fact that both the American Petroleum Institute and the Energy Information Administration reported massive builds of U.S. crude oil stockpiles. 

So why exactly would an open China get oil traders excited? Well, I don’t want to spoil their party, but it’s more than just oil fiends eagerly watching the Middle Kingdom closely. 

The easy answer is that getting their economy back on track would drive fuel demand higher in 2023. That means more crude oil imports directed toward Chinese refineries. 

Truth is, we won’t just watch oil prices rise — we’ll see an all-out scramble for more energy… including coal and natural gas. 

Recently, Fitch Ratings reported that China will remain highly dependent on imports to meet its natural gas demand this year. 

In fact, we know that China is committed to increasing its natural gas consumption over the next few decades. In order to satisfy that demand, China will continue doing what it has been — relying on LNG imports. 

But let’s dig down a little deeper into that thirst for LNG…

Wood Mackenzie has projected that China’s LNG demand will bounce higher in 2023, increasing as much as 14% compared with 2022. Although this is certainly a reason to lean bullish on LNG in the long term, remember that the energy landscape has changed radically over the last two decades. 

Meanwhile, global coal demand officially hit a new all-time high in 2022, topping 8 billion tonnes!

Keep in mind that China accounts for more than half of the world’s coal consumption. 

But wait, it gets worse.

You see, the world’s third-largest energy consumer is right next door — India. Coal demand in India is expected to rise by 8% in 2023–2024, compared with last year. 

And you might be surprised by who the winners will be in this energy rush.

The New World Energy Order

Take a moment and think back to 2006. 

If we told people back then that the United States would be a powerhouse in global oil, natural gas, and coal production, both of us would’ve been laughed out of the room in a blink of an eye. 

However, the world’s energy dynamic has shifted dramatically since then, and nobody is laughing anymore. 

Even the old OPEC from back in the day is a shell of its former self. The group was forced to join forces with several non-OPEC producers (most notably Russia) to maintain control over global supply. Even with sanctions placed on Russian oil, Russia’s prime minister suggested that Russia may cut production by up to 700,000 barrels per day. 

Now that China will soon be sucking up every last barrel of oil, last ton of coal, and every cubic foot of natural gas that it can get its hands on, that puts other buyers in an unfortunate position. 

Immediately, your mind should wander to Europe. 

Why? Well, because while China was locked down, EU members were forced to ramp up their own energy imports, specifically LNG. 

If the mild winter Europe has experienced thus far reverses, things could get ugly quickly. 

But here’s the catch…

It doesn’t matter if the continent manages to squeak through the winter of 2023 and avert an energy crisis. Russian energy has found a new home in China and India, and Putin has shown he’s clearly willing to let Europe suffer in the dark. 

And that, dear reader, leaves just one option left.

But don’t just take my word for it. Check out the details for yourself.

Until next time,

Keith Kohl

Check us out on YouTube!

A true insider in the technology and energy markets, Keith’s research has helped everyday investors capitalize from the rapid adoption of new technology trends and energy transitions. Keith connects with hundreds of thousands of readers as the Managing Editor of Energy & Capital, as well as the investment director of Angel Publishing’s Energy Investor and Technology and Opportunity.

For nearly two decades, Keith has been providing in-depth coverage of the hottest investment trends before they go mainstream — from the shale oil and gas boom in the United States to the red-hot EV revolution currently underway. Keith and his readers have banked hundreds of winning trades on the 5G rollout and on key advancements in robotics and AI technology.

Keith’s keen trading acumen and investment research also extend all the way into the complex biotech sector, where he and his readers take advantage of the newest and most groundbreaking medical therapies being developed by nearly 1,000 biotech companies. His network includes hundreds of experts, from M.D.s and Ph.D.s to lab scientists grinding out the latest medical technology and treatments. You can join his vast investment community and target the most profitable biotech stocks in Keith’s Topline Trader advisory newsletter.