for Peak Demand
Although the world is still in the midst of a seemingly perpetual glut, does a supply gap loom? Is peak oil demand imminent? Why is OPEC praising shale and meeting with hedge funds?
A combination of an extended period of low prices, consumers buying larger vehicles, and strong economic growth has caused demand to soar since it reached its nadir in 2012.
The International Energy Agency warns that the age of fossil fuels is far from over. Governments around the world need to step up their policy efforts to find alternatives in the transportation sector in order to keep demand in check.
Third quarter earnings figures for the oil majors reveal a mixed picture for the industry: Companies are dealing with more debt, weaker refining margins, and deeper spending cuts, but they are also experiencing increased optimism that the worst might be over.
Although shifts are taking place with EVs, autonomy, and more stringent fuel economy, it is not inevitable that we’ll shortly be in a post-oil world and that demand will peak sooner rather than later.
An extended period of upstream investment cuts and the fact that petroleum products still fuel more than 90 percent of the transportation sector could mean we’re headed for another price spike. But slower economic growth and structural shifts on the demand side could keep another bull market from occurring.
U.S. gasoline demand is at near-record highs. With VMT and sales of light duty trucks at their highest points in history and rising at record rates, we could soon be burning more gasoline than ever.