Oil Demand to Grow Steadily in 2020s

Oil Demand to Grow Steadily in 2020s
Oil demand will grow steadily in the 2020s and peak in the late 2030s, according to Rystad Energy's current long-term outlook.

Oil demand will grow steadily in the 2020s and peak in the late 2030s, according to Rystad Energy’s current long-term outlook.

“In our long-term outlook we currently see oil demand growing steadily in the 2020s and peaking in the late-2030s, as we incorporate moderate technological shifts and accelerated efficiency gains that will flatten on-road transportation demand and petrochemical feedstock demand growth towards 2040,” Rystad Energy’s Chief Oil Analyst Bjornar Tonhaugen said in a statement sent to Rigzone recently.

Tonhaugen warned however that in the company’s “low case”, oil demand could potentially peak ten years earlier, in 2027, “given additional demand displacement by a more rapid transportation electrification, oil-to-gas and oil-to-renewables power switching, and the integration of biofuels and bioplastics”.

The Rystad Energy representative added that “even in a scenario with more rapid transportation electrification, the E&P industry still needs to make new discoveries and/or find ways to extract more oil out of existing fields to satisfy oil demand to 2040”.

In the statement sent to Rigzone, Tonhaugen highlighted that Rystad Energy recently revised down its Brent estimate for 2019, 2020 and 2021 and said the company continues to “see a need for production management by OPEC+ again to balance the market in 2021”.

Demand is the biggest psychological headwind for oil right now, according to Helima Croft, head of commodity strategy at RBC Capital Markets, who expressed the view in a television interview with CNBC on Monday.

“I think demand right now is the biggest psychological headwind for oil. People are very concerned about the [U.S.-China] trade war. There’s still this sort of corner of the market that’s concerned about a global recession and so I think that is the biggest headwind that OPEC has to overcome in trying to stabilize the price environment,” Croft said in the interview.

“I think they’re doing a lot on the supply picture, but again, the demand outlook remains uncertain,” Croft added.

Rystad Energy is an independent energy consulting services and business intelligence data firm offering global databases, strategy advisory and research products for E&P and oil service companies, investors, investment banks and governments.

RBC Capital Markets is part of Royal Bank of Canada, which was established in 1864. Croft, who specializes in geopolitics and energy, joined RBC Capital Markets from Barclays. Prior to that, she worked in Lehman’s Business Intelligence group, the Council on Foreign Relations and the CIA.



WHAT DO YOU THINK?


Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.


Most Popular Articles