Here’s What The U.S. Blackout Means For World Energy Demand…

I woke up covered in sawdust and sweat – and my 120lb dog was breathing directly in my face.

It was night three of the mid-Atlantic power outage. Not only were we amongst the million+ people still without power, but another round of storms preempted our pooch to join us in our makeshift basement bed.

Sleeping in our sawdust ridden, under-construction basement wasn’t my first choice. But without air conditioning the temperature between the different levels of the house was oppressively different — 78 in the basement (as near the concrete as you can get), 85 in the living room and well into the 90s in the master bedroom.

If there’s one thing this journey through Satan’s playground taught me is that you can hardly put a price on the energy-based “stuff” we take for granted. There’s an investment opportunity laced in here too…

You don’t know how much you rely on energy until the power goes out. Unfortunately this is something that more than a million people in the mid-Atlantic region are finding out the hard, hot, sticky way.

But in a similar sense, the developing world is starting to rely on the new energy-based economy — gaining access to amenities they won’t readily want to give up.

You see, my dismay for several days without air conditioning was an economic lesson in the least. I’d have paid a lot of money just to enjoy something I’ve been accustomed to, a sweat-free night’s sleep. In fact, several acquaintances chose to sleep in hotels for the last few nights. At $120 a night, you can see that just one simple thing like climate control is worth plenty to people.

The same goes for the developing world, once consumers get a taste of modern conveniences they’ll likely pay a high price to keep them.

Energy intensive items like electronics and cell phones, cars and motorcycles, more energy-intensive food and, yes, air-conditioning are all leading to a massive upswing in the amount of energy emerging markets crave.

More important, these new consumers have the means to pay for these added conveniences.

We can see this through our best economic gauge, oil trends.

According to a recent data set from the International Energy Agency (IEA) total non-OECD demand for 2012 is expected to be 44.7 million barrels per day (mmbpd), up from just 43.4 mmbpd in 2011.

So even as demand from developed nations is stagnant or in some cases receding, non-OECD demand is making up for it…and then some.

Simply put, the non-OECD economy is becoming increasingly important — and the new kid on the block wants oil.

But here’s the pressing point: even after today’s bump higher, prices are well off their May highs. So while this large-scale trend is still proceeding — as planned — prices for oil, oil companies and oil service producers are all on sale.

The sustained demand growth for modern conveniences is set to keep oil and energy demand ramping higher. Unless the world can start producing much more, this means prices for oil and oil related companies are set to rise.

Keep your eyes on this globe-spanning trend, it’s becoming increasingly important.

Keep your boots muddy,

Matt Insley

Here’s What The U.S. Blackout Means For World Energy Demand… was originally featured in The Daily Resource Hunter. Check out the newest Daily Resource Hunter research video “The Price of Gas Explained”.

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