Before getting stuck into this very interesting subject, we do need to enter several caveats.
- the very fact it's not behind a paywall means that it's being sponsored - presumably by Oxy
- the definitions of "negative oil" that we encounter as we go along are pretty weasely - at one point it's as unimpressive as "you can have net negative reservoirs", which has been true for a very long time - in certain very specific and non-typical circumstances
- the "negative aluminium" stuff comes from "Russian owned EN+" (Deripaska), fronted on this occasion as on many others by "Lord" Greg Barker, a notorious BS merchant
On the other hand. The actual demand for oil & coal (as opposed to demand for oil shares and coal shares) isn't going to fall precipitously: it can't, while China still breathes**. It's all a bit reminiscent of the tobacco industry a decade or so ago.
What can easily happen, though, is that even with stable-ish demand, the cost of capital rises (due to unpopularity with investors). We're talking about western companies here, of course - there are loads of NOCs who don't care, and may be looking forward to stepping into the breach, picking up distressed assets and market share. But they ain't necessarily very good at production technology (or indeed finance), even if they plan to hire a bunch of mercenary engineers to help them along. (And there may not be so many of those; because the big players retreating from oil are piling into other energy tech, and will have jobs for many engineers - even if not always the same ones.)
So, while there'll be no shortage of oil, on both counts (cost of capital and engineering efficiency) production costs are going to rise.
One question, then, is: does this wash through into the price of oil? It's an important fact that in the short and medium term, production cost has bugger all to do with price except at the very sensitive margins. (Plenty of people will tell you there is $2 oil available in large amounts in Iraq; but ...)
Another question is: WTF happens to the pension funds of the western world while the IOCs are busily and expensively redefining themselves?
And I'm sure there are more such fundamental issues to ponder, when we're at such a remarkable turning-point. Have at it in the comments, C@W-ers.
** not intended as a pun or off-colour comment: but there is a point there