Oil: who is right? Bulls or bears?

In Energy on 20/03/2021 at 1:49 pm

But first, Brent crude rose 1.4% to US$64.18 a barrel, having dropped by 7% on Thursday. 

But longer term chart as of Thursday

The IEA is not buying the supercycle hype. Wall Street has grown increasingly convinced that oil is heading into another supercycle as supply lags demand growth, which has helped fuel oil’s rally towards $70 a barrel this year. But the IEA argues “there is more than enough oil in tanks and under the ground to keep global oil markets adequately supplied”.

Oil demand has not peaked, but growth is set to slow. The group sees a sharp rebound in demand this year after last year’s collapse, but growth quickly fizzles from 2022. Forecasted global consumption of 104.1m barrels a day by 2026 is up more than 4m b/d from 2019. Yet the 2025 demand outlook is 2.5m b/d lower than the group’s last forecast, reflecting a rise in electric vehicles and more efficient petrol engines. Although oil consumption growth has been dented, it remains far too robust for the world to hit long-term net-zero emissions targets, the group said. Serious policy and consumer behaviour changes are needed to bend the trajectory lower.


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