US$50 per barrel Oil from OPEC – Why Ford Motors is predicting a bright future for All-Electric Vehicles

“While some producers might be successful in lifting output in the short-run, we expect the majority will struggle to sustain higher rates over longer periods due to steep spending curbs”

IAE (International Energy Agency) Report on Oil Production from OPEC and Non-OPEC countries

So far, OPEC, (Organization of Petroleum Exporting Countries), the twelve (12) nation cartel led by Saudi Arabia, seems to be winning the battle of attrition against the United States.

This as Oil production from non-OPEC countries such as the US of A, has ground to a halt based on an IAE (International Energy Agency) Report as noted in the article “Oil Wars: OPEC is winning”, published Wednesday August 12 2015 by Ivana Kottasova, CNN Money. 

The price of Oil is now hovering at US$43.08 per barrel and shows no sign of slowing down, making this Oil War which started in November 2015 as chronicled in my blog article entitled “Lower Oil Prices Good for Jamaica - How All-Electric Vehicles Sales benefit as Electricity Prices trend lower” the biggest Oil Glut in 17 years.

Within the US of A 59% of Fracking Rigs that had been operating in June were still pumping Oil by July 2015.

With the price below US$50, Non-OPEC countries such as the US of A are now beginning to reduce their output, with production at 58.1 million barrels a day forecasted to drop by 200,000 barrels per day by 2016 as predicted in “UPDATE 2-IEA sees Oil glut persisting despite soaring demand”, published Wed Aug 12, 2015, Reuters. 

This contrasts sharply to a record growth of 2.4 million barrels a day in 2014 to 1.1 billion gallons per day in 2015. All this extra Oil is thanks to Hydraulic Fracturing or Fracking, which is both fuelling US of A Oil Production ambitions as well as being a lightning rod for controversy.

There is a bright spot to all this over-supply of Oil. OPEC Countries, who are expected to boost production to push prices into the US$20 per barrel range, are already signally they'll cut production.

The Fall in the price of Oil is affecting their economies as they, via OPEC, oversupply the market to pressure non-OPEC Countries into discontinuing Oil Extraction and competing with them.

So they can't hold out for very long.

But something else happening as well; Gasoline Prices are falling in Jamaica and Electric Cars are becoming more affordable.

US$50 per barrel Oil from OPEC – Why Ford Motors is predicting a bright future for All-Electric Vehicles

Currently in Jamaica as of  Wednesday August 12, 2015 as reported in the article “Gas Prices To Go Down By $2.91 Per Litre Thursday”, published Wednesday August 12, 2015, The Jamaica Gleaner, the price of Gasoline as sold by the state owned Petrojam Refinery has fallen to the following prices:

1.      JA$109.22 per litre for E10 87 gasoline

2.      JA$110.87 per litre E10 90 octane

3.      JA$95.63 per litre for Automotive Diesel Oil

4.      JA$93.20 per litre for Kerosene

5.      JA$38.90 per litre for Butane

If prices reach in the US$20 per barrel by 2016, we might see these prices cut in half.

But what this also means is that All-Electric Vehicle adoption will accelerate as I'd predicted in my blog article entitled “Lower Oil Prices Good for Jamaica - How All-Electric Vehicles Sales benefit as Electricity Prices trend lower”.

Interestingly, a poll conducted by Ford Motors indicates that many Americans who've decided to switch to All-Electric Vehicles have no intention of changing back to their gasoline variants as reported in the article “Ford Says Most Electric Vehicle Drivers Won't Go Back To Gas: Report”, published AUG 11, 2015 by Brooke Crothers, Forbes.

Their poll of some 10,000 electric vehicle owners returned the following interesting statistics:

1.      92% of BEV (battery electric vehicle) drivers will buy another All-Electric Vehicles

2.      94% of PHEV (plug-in hybrid electric vehicle) will buy another All-Electric Vehicles

Their second vehicle of choice was, surprisingly, a BEV. I say “surprisingly” as the range anxiety problem associated with BEV is compounded by the lack of charging infrastructure that even uses the same payment method as shown below.

The reasons for the choice?

Aside from cheaper electricity thanks to falling Oil Prices, which looks set to last for the next five (5) years, there is also the Instant-on Nature of All-Electric Vehicles and the fact that they start when required.

I suspect Range Anxiety might not be an issue for many, being as their daily commute, which now occurs in super silence, is just from home to work.

A drive into the country-side might be tricky. But if you plan it properly and you have a portable Electric Generator and some cheap gasoline, then you'll have no problem!