Story by Andreas Exarheas|RigZone.com| In the latest Dallas Fed Energy Survey, which was released last week, executives from 138 oil and gas firms were asked what impact they expect the energy transition to have on the price of oil, looking five years ahead.
The most popular answer, given by 33.3 percent of respondents, was a “slight increase”, while 32.6 percent of those surveyed revealed that they expect a “significant increase”. Twenty-five percent said they expect “no impact” and nine percent anticipate the energy transition to decrease the price of oil.
“The energy transition impact on price will be hard to quantify,” one exploration and production firm noted in the latest Dallas Fed Energy Survey.
“At first thought, one would think it would cause a decrease in prices from reduced demand. However, as we continue the transition and U.S. oil production likely declines (which will be dependent on a large array of factors, including government regulations, investors, etc.), OPEC will continue to gain a larger market share and is expected to reach levels higher than any point in history,” the company added.
“As such, I would expect OPEC to continue holding prices above certain levels with more power to do so,” it continued.
Another exploration and production company stated in the survey that “the energy transition will cause a very significant increase in overall energy costs to consumers but will have a lower impact on the price of oil”.
That company said in the survey that oil “is a worldwide commodity, manipulated by individual governments”.
In a report sent to Rigzone last week, Standard Chartered revealed that it sees the price of NYMEX WTI averaging $88 per barrel this year, $95 per barrel in 2024, and $106 per barrel in 2025. The report showed that the company projected that the ICE Brent price would average $91 per barrel in 2023, $98 per barrel in 2024, and $109 per barrel in 2025.
At the time of writing, the WTI crude oil price is trading at $91.12 per barrel and the Brent crude oil price is trading at $92.52 per barrel.
2050 Oil Demand
The latest Dallas Fed Energy Survey also asked executives from 137 oil and gas firms how they expect global oil consumption in 2050 to compare with current levels.
“The percentage of executives who expect global oil consumption in 2050 to be higher when compared to current levels exceeds the percentage that expects it to be lower,” the survey stated.
“Of the executives surveyed, 28 percent expect global oil consumption in 2050 to be slightly higher when compared to current levels, and an additional 25 percent expect it to be significantly higher,” it added.
“Meanwhile, 25 percent of executives expect consumption to be slightly lower in 2050 when compared to current levels, and an additional eight percent expect it to be significantly lower. Fifteen percent expect global oil consumption in 2050 to be close to current levels,” the survey continued.
One exploration and production company noted in the survey, “while the development of alternative energy sources moves forward, I still believe the need for hydrocarbons in its various forms will increase over time”.
BP’s latest energy outlook, which was released in July, shows oil demand declining by 2050 under the three main scenarios it focuses on, which are dubbed Accelerated, Net Zero, and New Momentum.
“Oil continues to play a major role in the global energy system over the first half of the outlook in Accelerated and Net Zero, with the world consuming between 70 – 80 million barrels per day in 2035,” BP states in the outlook.
“The decline accelerates in the second half of the outlook, with oil demand reaching around 40 million barrels per day in Accelerated and 20 million barrels per day in Net Zero in 2050,” it added.
“Oil consumption in New Momentum is stronger, remaining close to 100 million barrels per day through much of this decade, after which it declines gradually to around 75 million barrels per day by 2050,” the outlook continued.
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