The economic slowdown imposed by the pandemic drastically incapacitated the global demand for crude oil.
In the early onset of COVID-19, when mobility restrictions became the norm, oil inventories on stockpile skyrocketed pulling prices to negative.
Major oil consumers, including airlines, continue to import limited amounts as tourism is not expected to pick up until the next three to five years.
Recently, the rising sales in electric vehicles, particularly of major market movers, experienced soaring stock prices due to successive months of profitability.
This is one of the major indicators that the market is ready to shift from traditional crude oil to exploring renewable energy capabilities.
In April, the once-in-a-century production cut agreed by OPEC Members shocked oil industry analysts. Mainly because it rarely resorted to such a scheme in the past.
Consequently, the organization will convene another meeting on September 17. Industry experts predict that OPEC will apply further production cuts with demand not picking up as expected.
BP energy, one of the world’s oil supermajors, released its most-anticipated annual report on the future of energy. It indicated that oil demand may never go back to pre-pandemic levels again.
The crude oil will face head-to-head competition with new market entrants. Namely clean energy from wind farms generated from windmills, solar panels, and hydropower plants.
Currently, renewable energy is starting to carve a place for itself as the fastest-growing energy source.
The decline will be sustained in the decades to come as climate action is fueled by government. And as non-government agencies continue to harvest significant following worldwide.
The firm called industry counterparts to give significant attention to the movement of demand on fossil fuels. As it believes that oil demand has already reached its peak in 2019 and is now headed for decline.
Growing Stockpiles and Slowing Imports
BP’s report comes as an initiative so it could better understand the shifting energy landscapes. Thereby making a significant change for survival.
It will leverage the findings as it moves towards its vision of becoming a carbon-neutral energy company by 2050.
According to a similar report, crude oil decline could hit 80% by 2050. Moreover, it could be higher should governments choose to resort to a green economic recovery.
Existing data recorded support the findings of BP in recent weeks by oil market watchers, although designed for short-term analysis.
In its latest report, the American Petroleum Institute recorded an unexpected crude oil stock build-up by 3 million barrels per day for the week ending September 4.
This is much to the spectators’ dismay as analysts forecast a draw amounting to 1.4 million barrels per day.
Similarly, the inventory growth came at a time when the United States celebrates the Labor Day holiday.
In current figures, oil prices rose slightly as the Gulf Coast prepares for another tropical storm.
US benchmark West Texas Intermediate crude futures are up by 18 cents to $37.51 per barrel. While Brent crude futures play at $39.92, gaining 9 cents.
The move brings a halt to the bleeding as crude oil benchmarks fell below the $40 per barrel since last week.