Oil – DeCAF helps fund carbon cash cows?

Intuitively, the oil price should matter, so as
volumes decline, value can still be created , temporarily,
since the value that is created is later passed
into the economic chain , where it fuels
inflation , thus eroding economic gains for all.

But itis not that simple and 2018 is the year which will
clarify which of the oil majors have the potential to
morph into carbon cash cows – highly proftable
entities that rely on relatively scarce and declining
volumes. At least three things need to happen for
the oil majors to become proftable on declining
volumes.

Capital discipline must be enforced,
stranded asset and carbon pricing risks need to be
contained, and investors should be aware of
political decisions that are increasingly infuencing
which assets are developed in which countries.These
assets over time distort economic well being,
driving the market into artificial pricing strategies,
which ultimately lead to collapse at some point.