Oil consumers have had some relief in recent weeks as the Brent crude benchmark slipped from US$90 per barrel mark in mid-October to hover above the US$80/bbl mark due to ongoing concerns about the state of the global economy.

While there’s still the very real threat that oil prices could soar if the conflict in the Middle East escalates – up to US$150/bbl according to the World Bank – as things stand now, prices are likely to stay within the US$80 to US$90 range.

There are several reasons for this.

First is that Saudi Arabia will likely maintain its production cuts that are likely the only thing keeping prices above US$80/bbl in the first place. That is if they don’t decide that further cuts are needed.

Second, unless the balloon goes up, the oil market will remain balanced between the risk of a recession, uncertainty brought about by the Israeli-Palestinian conflict and demand.

A third factor appears to be Russia’s seeming inability to stand by its own output cuts, which were made with Saudi Arabia.

Could the equation change outside of an escalation in hostilities? Certainly.

One of the most likely is that Saudi Arabia and/or the rest of OPEC could decide to cut crude oil production further, which will likely to drive prices up.

Renewables to save our bacon this summer

On the home front, the threat of blackouts brought about by heatwaves lifting electricity demand to decade highs this summer has been alleviated by extra renewable generation capacity.

The Australian Energy Market Operator noted in its summer readiness report that the eastern states will have 1,500Mw more scheduled generation capacity than last year despite the closure of the remaining units of the Liddell coal-fired power station.

This is thanks to additional capacity from new wind and solar farms as well as further growth of rooftop solar power.

Renewables are still some ways from providing all our power needs, but this development clearly highlights their continued growth as well as our likely future.

More renewable energy projects are likely to come online over the years, providing even more power to meet demand and replace first coal, then gas-fired plants.

But in the long-run, renewable generation can only go so far.

What’s needed to really bring stability to the grid and enable renewables to replace fossil fuels is energy storage, a lot more energy storage.

Whatever method we use, be it lithium-ion batteries, one or more of the emerging crop of flow batteries, pumped hydro or some more esoteric form of energy storage, Australia’s focus should really be shifting to this field in order to meet those ambitious emissions reductions target.

And we need to do it now.