Global oil prices could drop to around $40 a barrel by 2030 if governments push to reduce fuel consumption in step with U.N.-backed plans to limit global warming, a leading energy consultancy said on Thursday.<\/p>\n
In a report outlining a scenario where the world acts decisively to tackle greenhouse gas emissions by electrifying transport and industry, Edinburgh-based Wood Mackenzie said oil consumption would begin a steep drop as early as in 2023.<\/p>\n
The decline in demand would accelerate to a rate of 2 million barrels of oil per day (bpd) to reach 35 million bpd by 2050, accounting for a 60 per cent drop in carbon emissions from oil use from today’s levels.<\/p>\n
Oil consumption hit a record of around 100 million bpd in 2019 and is expected to recover strongly this year after cratering last year due to the coronavirus epidemic.<\/p>\n
As a result, oil prices would begin to slip later this decade, WoodMac said in its report. Under its Accelerated Energy Transition scenario, it expects Brent crude prices to average $40 per barrel by 2030, compared with current prices of around $65 a barrel.<\/p>\n
By 2050, Brent may slide to $10 to $18 a barrel.<\/p>\n
“If we move to keep global warming to the 2 degrees Celsius limit set by the (U.N.-backed) Paris Agreement, the energy matrix will change – and change profoundly,” said WoodMac’s Ann-Louise Hittle.<\/p>\n
The world’s current policies are nevertheless far from aligned with the Paris agreement, with temperatures currently on course to rise by 3 degrees Celsius from pre-industrial levels by 2100, WoodMac stressed.<\/p>\n
A rapid decline in demand also means that existing sources of oil supplies would be sufficient to meet all future demand, with only limited need for new oifield developments, WoodMac said.<\/p>\n
A sharp fall in oil demand and prices in the coming decades would have a profound impact on major oil producers such as members of the Organization of the Petroleum Exporting Countries, WoodMac said.<\/p>\n
“The steep fall in demand prevents those key oil producers from managing the market and supporting prices in the way it does today. Despite losing their price-setting ability, however, low-cost Middle East OPEC producers remain core providers of oil.”<\/p>\n
Natural gas, the least polluting fossil fuel, would, however, fare better than oil by replacing coal for power generation, particularly in fast-growing Asian economies, the report added.<\/p>\n
As oil prices declined, gas would eventually trade at a premium to oil under WoodMac’s scenario. Benchmark U.S. Henry Hub prices are forecast to trade at $3 to $4 per thousand cubic feet (mcf) under WoodMac’s scenario.<\/p>\n
Gas demand in Asia would increase on average by 1.5 per cent a year through to 2050, offsetting declines in more mature markets, which would be switching to renewables from gas.<\/p>\n","protected":false},"excerpt":{"rendered":"
Global oil prices could drop to around $40 a barrel by 2030 if governments push to reduce fuel consumption in step with U.N.-backed plans to limit global warming, a leading energy consultancy said on Thursday. In a report outlining a scenario where the world acts decisively to tackle greenhouse gas emissions by electrifying transport and industry, Edinburgh-based Wood Mackenzie said oil consumption would begin a steep drop as early as in 2023. The decline in demand would accelerate to a rate of 2 million barrels of oil per day (bpd) to reach 35 million bpd by 2050, accounting for a […]<\/p>\n","protected":false},"author":39,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[133],"tags":[],"class_list":["post-410963","post","type-post","status-publish","format-standard","hentry","category-oil-gas"],"acf":[],"_links":{"self":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/410963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/users\/39"}],"replies":[{"embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/comments?post=410963"}],"version-history":[{"count":0,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/posts\/410963\/revisions"}],"wp:attachment":[{"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/media?parent=410963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/categories?post=410963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/infralive.com\/web\/wp-json\/wp\/v2\/tags?post=410963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}