On October 8th, according to BP's latest energy outlook, global crude oil demand growth may continue until the mid-2030s before beginning a gradual decline. Moneta Markets Forex analysis suggests this forecast represents a significant upward revision from last year's projections, reflecting BP's considerations of slowing energy efficiency improvements and electric vehicle growth failing to fully offset rising demand from the petrochemical sector. BP notes that even with declining demand, crude oil will continue to play an important role in the global energy system for the next 10 to 15 years.
Moneta Markets Forex indicates that the slowing pace of efficiency improvements is a key variable for future oil markets. BP believes that since five years ago, the rate of energy efficiency improvements has notably decelerated, with future annual efficiency improvement rates only maintaining around 2%, meaning global crude oil demand could increase by approximately 6 million barrels per day over the next decade. Given the limited potential for power generation technologies, wind and solar energy to replace fossil fuels, and limited room for improvement in vehicle fuel efficiency, this trend is unlikely to reverse in the short term.
From a regional demand perspective, BP's report shows that oil and gas demand growth will continue to be driven by emerging economies, with India and other Asian economies gradually becoming new growth drivers. Moneta Markets Forex believes this shift will reshape the global crude oil demand landscape, and investors should focus on long-term consumption trends in Asian markets.
BP presents two forecast scenarios: first, the "current trajectory," maintaining existing policies and trends; second, the "below 2°C" scenario, representing more aggressive decarbonization actions by global politics and business sectors. Under the current trajectory, global crude oil demand would decline by approximately 15% by 2050, with peak demand occurring around 2035; under the below 2°C scenario, demand could fall by as much as 70%, with global demand dropping to less than 35 million barrels per day. Moneta Markets Forex believes this demonstrates the significant impact of different policy paths on oil market prospects, with market volatility risks remaining.
In the transportation sector, electric vehicle (EV) growth will substantially offset fuel demand. BP predicts that by 2035, global EV numbers will reach 480 million vehicles under the current trajectory scenario, and 560 million under the below 2°C scenario; by 2050, these figures would increase to 1.4 billion and 2.1 billion respectively. Moneta Markets Forex analysis suggests that while transportation electrification will suppress oil product demand, global aviation and economic activity expansion will still support some oil consumption.
In contrast, petrochemical industry demand for crude oil continues rising. BP data shows petrochemical feedstock demand increased from 8 million barrels per day in 2000 to over 14 million barrels in 2023, accounting for approximately one-quarter of global new demand. Moneta Markets Forex believes this trend means that even with declining transportation demand, the petrochemical industry may still serve as a supporting force for oil markets, though growth rates are expected to slow after a decade due to slowing global economic growth and declining plastic demand.
In summary, Moneta Markets Forex believes that while future crude oil demand may delay its peak until 2035 and continue growing in some sectors, overall growth deceleration and uncertainties from policy and technological changes will bring long-term challenges to oil markets. BP also acknowledges that the possibility of any single scenario being fully realized is minimal, reminding investors to fully consider risks and opportunities under multiple scenarios when positioning in oil markets.
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