Peak oil demand forecasts dry up as demand grows | OilPrice.com

In the minds of many news consumers, oil is on the rise. So is coal and coal. The same is true of gas, although one can stick for a little longer. After all, we are entering a new era of clean energy, and although it will take some time to get there, it is the only option for the future. And fossil fuels have no place in the future.

So the recent oil, gas and coal prices rally should come as a shock to that hypothetical news user. According to the protest, the news does not always reflect the truth. So are oil and gas prices. Remember when there was a gas boiler recently like last year? He said everyone would continue to keep prices low. But it did not happen. This year, his stomach suddenly stopped.

Predicting prices for oil — or obviously gas — is a well-known uncertain business. But that does not stop hundreds of thousands of people from working hard every day. Nowadays, most forecasters seem to expect inflation to continue because there are so many things that are simply working to support them.

In the long run, predicting oil prices will be even more challenging. It’s especially challenging right now because some forecasts seem to be in line with the current trend and a lot of reviews are being done now, reports The New York Times. Report. The improvements, however, are not on average fuel prices this year and next. They are concerned about the high demand for oil.

The main premise is that renewable energy acceleration kills oil demand growth in a few years, at most a decade. But for some reason this narrative did not precede the present procession. He never imagined that the demand for coal would increase not only in the traditional area but also in developing economies, as well as in the United States. Consumption It is on its way to growth for the first time since 2014. This year’s violence has ruined many narratives.

The short-term price point is impressive. Crude oil reserves are being recorded around the world, and OPEC + is in the process of making its first decision to increase its combined production by only 400,000 BPD. But he did not do so because some of his members were struggling to make ends meet due to years of low investment.

Demand is growing, and as the space between them increases, so does the supply of energy 500,000 BPD And 750,000 BPD To the global daily average. This, combined with reports that US crude oil reserves are down 6 percent on average this year for five years, and OECD products are 162 million barrels less than the five-year average before Covidy. Keep prices above $ 80 per barrel and trigger forecasts for three-digit prices.

This usually happens when there is an increase in prices, but this time the increase was not as normal, part of the commodity price cycle. In this case, inflation is caused by a severe shortage of fossil fuels – fossil fuels. This fact may have sparked much-needed discussion of governments’ approach to renewable energy, but it has not, but not in public. However, it is doubtful that the transition will work out as planned. And price forecasts reflect these doubts.

Some are talking about $ 200 Brent and not just talking but Bet On it. These can be crazy bets, but they reflect more uncertainty about oil expectations, they have increased more than usual. In fact, Brent’s increase to $ 200 per barrel can only happen when the decline in production is significantly reduced, and this may not happen immediately as next year.

But there are other indications that fossil fuels are exaggerated. Fund managers return to oil and gas reserves, Reuters Reported this week. Despite ESG investment over the past few years, funds are now eager to increase their exposure to oil and gas, in this year’s stock price rally. Energy stocks outperformed the S&P 500 by 53.8 percent last month, up 20.2 percent for the broader index.

The big question now is how long the march will last. No oil price rally will last forever but according to NYT, there are two different explanations that determine the long-term outlook for oil price movements. One is the short-term increase in prices due to the epidemic. Another is the difference between the desire for release and the ability to achieve it.

Some want to bet on the first explanation. However, the second explanation is more true in terms of investment decisions.

A recent UNEP report Warned The oil and gas production plans of the 15 major producers are in stark contrast to the Paris Agreement. In other words, these 15 major producers continue to trade in oil and gas, despite their desire for emissions, including their own net-zero targets. Oil may not reach $ 200 next year or ever, but it could be used longer than many expect and believe.

By Irina Slav for Oilprice.com

More high reading from Oilprice.com

.

Leave a Comment