It’s been a strange month — plenty of reasons to be MORE bullish on conventional energy fundamentals, but a clear regression in investor sentiment, reflected in crude prices. My view is that there should be an oil price spike, but that the last six months are not ‘it,’ as fear, violence, weather, and QE2 (for instance) have all provided non-fundamental tail winds. Now, relatively new, and (for the hydrocarbon economy) bullish events include spreading nuclear remorse, renewable policy back tracking, nonOPEC developmental challenges, frack/water management woes, and the (yet) worsening hallucinations of politicians. On top of the ‘hole in the project pipeline (see prior issues)’ and the Macondo Moratorium, and with increasing signs of a severe seasonal power shortage in China, the risk that the next spike could be higher and longer is increasing. I do believe that, the stronger/longer the spike, the greater the eventual and permanent demand destruction, as numerous improvements in transport efficiency – batteries, natural gas, improved ICEs, all come to bear, while lower solar/wind costs, and even newer “cleaner” coal-fired power, all conspire to bring cost saving opportunities in the US and other oil-importing regions. But how many years to Demand Destruction Day? And, on the way to “then,” who needs a carbon tax to kill demand, when short sighted policies can get us there without the signing ceremony?