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Page added on March 9, 2018

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Shell Says Oil’s Not Going Anywhere

Consumption

There’ll be at least one home still welcoming fossil fuels in the face of a growing threat from cleaner resources, according to Royal Dutch Shell Plc.

Heavy industry relies on hydrocarbons to generate extremely high temperatures and chemical reactions, according to Mark Quartermain, vice president of crude oil trading and supply at the company. Many processes used in iron, steel, cement and plastics factories can’t be electrified at all, and even if they could be, cannot be done at a viable cost in the foreseeable future, he said at a conference in Singapore.

A growing body of research is painting a bearish picture for oil beyond the next 20 years, as more electric vehicles hit roads across the globe and engines become more efficient. Rapid adoption could mean demand peaks by the 2030s, according to Bank of America and BP Plc, a prospect that’s likely to worry institutional investors in the energy industry. On Friday, the International Energy Agency said oil demand from passenger cars will peak in 2020.

Oil Peak

BP forecasts oil demand to grow until the mid 2030s

Source: BP

Still, some industry watchers have predicted dirtier sources of energy such as crude oil will hold their ground in spite of an expansion in the use of more environmentally friendly machines like EVs. Growth in air travel and petrochemicals will continue to support long-term oil demand and the market may see another supercycle because of underinvestment and a peak in U.S. shale output, Sanford C. Bernstein said this week.

“Energy transition is underway, let’s not put our head in the sand and ignore that, but it will unfold differently in different sectors,” Quartermain said at S&P Global Platts’ annual Asian Refining Summit. “A switch to use electricity powered by low-carbon and renewable sources will be relatively straightforward in some sectors of the economy, such as manufacturing of clothes and food, which require low-temperature processes.”

Oil continues to play a fundamental role in today’s world, and global demand will continue to rise before a slight decline in the late 2030s, when peak consumption may occur, he said. While Shell sees gas playing an important role as well, oil demand is predicted to grow in the next 20 years.

Brent futures for May settlement traded 39 cents higher at $64 a barrel on the ICE Futures Europe exchange at 10:16 a.m. in London. Prices have lost about 4.3 percent this year.

bloomberg



4 Comments on "Shell Says Oil’s Not Going Anywhere"

  1. bobinget on Fri, 9th Mar 2018 10:09 am 

    IEA – World Oil Demand to Increase 1.2 Million A Day per year For Next Five Years
    India, China to fuel 50% of rise in global oil demand in 5 years

    India and China are set to contribute nearly 50 per cent to the increase in the global demand for oil over the next five years, the International Energy Agency (IEA) said in its report on oil sector for 2018. According to IEA, demand is expected to grow at an annual rate of 1.2 million barrels per day (mbd) until 2023, as the oil demand would reach 104.7 mbd, up by 6.9 mb day from 2018. “As China’s economy becomes more consumer-oriented, the rate of growth in oil demand slows down to 2023, compared with the 2010-17 period. By comparison, the pace of oil demand growth will pick up slightly in India,” it says. The report says that though there is no peak oil demand in sight, the pace of growth will slow down to 1 mb per day by 2023 after expanding by 1.4 mb per day in 2018. “There are signs of substitution of oil by other energy sources in various countries. A prime example is China, which has some of the world’s most-stringent fuel efficiency and emission regulations. As the country recognises the urgent need to tackle poor air quality in cities, efforts are intensifying,” it adds. The report highlighted that sales of electric vehicles were rising and there was strong growth in the deployment of natural gas vehicles, particularly in fleets of trucks and buses. It said a rising number of electric buses and LNG-fuelled trucks in China would significantly slow down gasoil demand growth. “Oil market is likely to tighten by 2023 with increased risk of price volatility.

    The market could go through two phases during the next six years. Through 2020, record supply from non-OPEC countries more than covers expected demand growth. By 2023, if investments remain insufficient, the effective global spare capacity cushion falls to only 2.2 per cent of demand and raises the possibility of oil prices becoming more volatile until new supplies come on line,” research agency CARE Ratings said in its comments on the IEA report. It added that there would still be a continued reliance on OPEC countries for a major share of global supply. “Within OPEC, more than 2 mbd of spare capacity is held in Saudi Arabia. In turn, this emphasises the crucial role OPEC’s largest producer continues to play in providing stability to global oil markets,” it said.

  2. bobinget on Fri, 9th Mar 2018 10:13 am 

    By 2022 ChIndia will absorb EVERY available
    exportable barrel available.

  3. dave thompson on Fri, 9th Mar 2018 12:06 pm 

    I hope Cloggie does not see this article, he might become upset.

  4. Anonymouse1 on Fri, 9th Mar 2018 1:09 pm 

    Cloggen-fraud has trouble adjusting to this reality facts. Like the fact that FF underlie the production of well, everything. Of course, in his alt-reality Earth, windmills and solar panels power the entire life-cycle of every single artifact that can exist, from extraction, to disposal. Which sounds grand of course, but that was in HIS alt-universe’s Earth, and we have no way of visiting there. Once he awoke in this reality, and he learned FF are what makes wind turbines, solar panels, his moon vacation resort, and his flying electric robo-cars* possible, he has never been been able to accept this fact. Like human induced climate change, cloggen-fraud, he denies fossil-fuels role creating any and all industrial artifacts. He has even go so far as to ask for ‘sources’, in the form of a web-link of course, that ‘prove’ FF underlie all modern industrial processes.

    *These are so common in his native Israel no one even bothers to comment on them anymore, or so clogg-berg tells us anyhow.

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