Price of crude oil to surge despite growing EV demand

Forecast show Brent crude prices are to rise to $75 a barrel in the third quarter despite the push for electric vehicles. The hunger for oil and gas is still there, says forecast.

Goldman Sachs recently raised its estimates for oil prices based on increasing demand and a slow rebound in supply.

While this is normal for the oil industry with its ups and downs, this is a very bullish expectation from Goldman Sachs.

They are the only ones making such a bold prediction while others point to lower prices for oil.

The website Dear Wall Street says the turbulent oil market was not such a surprise in 2020 and in the first quarter of this year. 

The impact of the COVID-19 outbreak saw the demand for oil weakening. People barely drove, flew, or used transportation last year.

This is changing this year and most of the nations badly inflicted by the pandemic are opening up.

In the US, the Energy Information Administration predicts global consumption of 92.4 million barrels per day (BPD).

The average was more than 100 million BPD in 2018 and 2019.

This year’s outlook is a lot better with the EIA seeing global fuel demand at nearly 98.2 million BPD.

STRONGER WORLD ECONOMY

The International Energy Agency anticipates oil consumption will average about 96.9 million barrels per day.

They predict robust demand for gasoline and diesel, expected to return to about 99% of their pre-COVID levels.

S&P Global Platts Analytics says global oil demand will rebound by more than 6 million b/d in 2021.

“After stalling in the early part of 2021, the world economy is expected to turn stronger starting from spring, as the wider availability of vaccines will lift consumer sentiments.”

“Growth continues to bear the feature of recovery from 2021 which is still affected by COVID-19,” Platts Analytics said.

ELECTRIC SURGE

Meanwhile, the world is also seeing a surge in Electric Vehicle demand, though their sale is still pretty low compared to fossil fuel transportation.

Here’s a little forecast on the EV marketplace.

A final tally by HS Markit shows global sales of battery electric vehicles (BEV) and other EVs have reached nearly 2.5 million in 2020. It is to rise by about 70% in 2021.

However, global sales of automobiles fell to just under 64 million units in 2020, down from a peak of almost 80 million units in 2017!.