Abu Dhabi - Is peak oil gone and forgotten?
Google searches for the idea that once helped propel oil prices to nearly $150 per barrel have dwindled to almost nothing, according to a Sanford C. Bernstein analysis.
The theory that oil prices would have to rise as supply inevitably declined gained hold on popular imaginations in the mid- to late 2000s, but has since languished in internet obscurity, as new discoveries and technology, including the shale revolution that helped push US oil production to a 40-year high, have ensured plentiful amounts of crude in recent years.
Underscoring the trend is the fact that Google searches for "too much oil" recently outstripped searches for "Peak Oil." Prices per barrel are currently languishing around $45.
"As interest in shale-led supply peaks, then naturally interest in the old concern of 'Peak Oil' has all but disappeared after the surge in focus on this during the mid-2000s," Oswald Clint and Mark Tabrett, Bernstein analysts, wrote in a note lamenting the "short-termism" of the oil market and its tendency to seize on a particular narrative to predict future price moves.
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While Google searches might not capture the entirety of oil investors — including professional traders who presumably have access to data not available to curious web browsers — they are a useful indicator of the ideas currently capturing the market's collective hearts and minds, Bernstein argues. Since early 2015, for instance, searches for "oil inventories" have dominated and surpassed searches for "oil demand" and "oil supply," as investors attempt to gauge the size of the supply glut — particularly in the US.
"When it comes to oil markets, short-termism remains rife," the analysts said. "This is evident from changes in Google search trends. Shortly after oil prices started to fall, searches for oil inventories picked up and have only increased since. Oil demand related searches have increased over the same time but oil supply searches have hardly changed."