Two major forecasters see a sharp penetration of EVs in the next couple of decades. Although the outlook for EVs and the transportation sector is improving quickly, oil demand is likely to continue to grow.
Digital technologies may lower oil and gas production costs by 10 to 20 percent. As a result, technically recoverable oil and gas reserves could climb by as much as 5 percent globally, with the largest gains from shale gas.
It’s Déjà Vu All Over Again: OPEC, Petroleum Investment, and the Threat to U.S. Consumers and Energy Security
Over the decades, a key to these extreme shortages and surpluses in the global oil market is OPEC’s role in structurally either undersupplying the market or mismanaging its investment function.
The car industry is moving forward with new EV models, governments have set aggressive targets, and consumers are becoming more comfortable with the new technology, bringing about ideal conditions for electric cars to continue to thrive, even with low oil prices.
Electricity and renewable investments fell modestly last year, but the lower price environment over the past three years has taken a particular toll on upstream oil and gas outlays.
Recent reforms scrapped the requirement that Petrobras own a 30 percent stake in all pre-salt oil fields, essentially opening the door to private international companies. As a result, Brazil's oil production is flourishing.
Likely with window dressing.
While growth in shale has garnered a lot of attention, overlooked is the fact that Canada and Brazil are expected to add a combined 2 mbd over the next five years.
Despite continued rapid growth in U.S. shale, the global oil market could see price spikes and increased volatility at the beginning of next decade.
The reasons for the positive demand revisions come from every region of the global oil market, with stronger economic activity the main reason for the more optimistic outlook.