Two of the most popular articles last week among Rigzone’s downstream readers depict ominous scenarios, with one discussing a possible new energy villain – in the minds of some – and another presenting a dreary future for oil producers. Read on for more details.
Natural gas may be the new fuel pariah with emissions-wary investors and utilities, displacing coal as the popular energy bogeyman, according to this Bloomberg article. Moreover, the news service observes that natural gas’ appeal with such groups may be fading more quickly than it did with coal. The article points out that major banks have succumbed to pressure from shareholders, tightening financing restrictions on thermal coal power generation facilities. It adds that a similar situation may be unfolding with natural gas, with some firms in Europe already reporting difficulties selling gas-fired plants. Falling renewables costs present an impetus to move away from gas in power generation, but a gas phase-out in other sectors as well as the push to achieve net-zero emissions represent even greater threats, Bloomberg notes.
Under one of its oil demand projections, Wood Mackenzie foresees the start of a decline in demand two years from now. In subsequent years, the consultancy projects demand declines to accelerate on the order of 2 million barrels per day annually. Given the demand declines over time, the firm stated that Brent prices could average $40 per barrel by 2030 and from $10 to $18 per barrel by 2050.
The oil market witnessed an unprecedented glut of surplus crude during the COVID-19 pandemic, but the glut itself will soon be history, Bloomberg reported. The news agency observed the International Energy Agency has revealed that just 20% of the surplus remained in developed economies as of February. It marks a dramatic shift from last spring, when major trader Gunvor Group Ltd. feared that the world would soon run out of oil storage capacity.
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