Driven by the rise of battery gigafactories and game-changing Powerwall and energy storage businesses, the world now finds itself at the beginning of a lithium super cycle that is all about securing new supply, much of which is poised to come from lithium superstar Argentina.
While Saudi Arabia has been burning through $12-$15 billion per month from its financial reserves to fund government spending through this period, it seems the policy is that the path to a much higher price and higher revenue will come about by allowing for a prolonged low price.
Demand for lithium will continue to rise throughout the year--and beyond--spurred by the rise of battery mega/gigafactories and a burgeoning energy storage business that will change the way we live.
Intensifying financial pressures on Russian energy companies, Saudis and their Gulf Arab allies might be tempted to decide to maintain pressure on prices and force Russia to absorb the cuts necessary to balance the global crude markets.
Will oil market miss the coming wake-up call and instead deliver a severe supply disruption with skyrocketing prices and a political response along the lines of windfall profits taxes?
There is more risk of oil prices to the upside than there is to the downside during 2016. The average prices are expected to oscillate between $45 and $48 during the year.
Even though it remains a remote possibility, direct military confrontation between Saudi Arabia and Iran could well put oil back into triple-digit territory in short order.
In other words, global economic weakness and the glut in oil supplies will continue to weigh on crude. At this point, only tension in the Middle East is providing a bit of a lift to oil markets, but even that won't be enough to push up prices in any lasting way.
OPEC does not see oil prices returning to triple-digit territory within the next 25 years. The group expects oil prices to rise by an average of about $5 per year over the course of this decade, only reaching $80 per barrel in 2020. From there, it sees oil prices rising slowly, hitting $95 per barrel in 2040.
Is the dangerously unspoken theory that ISIS is a bulwark against Iran what's keeping the West from tackling the Islamic State wholeheartedly on its territory? With no nation that can control it, the threat is now out of control and a war of ambiguous targets is emerging.