RSS   Newsletter   Contact   Advertise with us

Oil demand growth to fall below 1% by 2018

Staff Writer | November 15, 2016
Impact investment firm Wermuth Asset Management (WAM), has said that regardless of whether oil prices rise around potential OPEC production-capping news, there is no long-term future for the hydrocarbon sector.
Oil demand
Energy   According to WAM research:
Solar power is now available at $3 cent/kWh, which is equivalent to oil at $5/barrel.

According to WAM research, continued investment in oil & gas exploration would only make sense if oil majors and oil producing countries were to develop new projects that could output at less than $5/barrel.

OPEC expects demand growth to slow from 1.3% this year to 1.2% next year. WAM’s research indicates that while oil supply might not peak in the next few years, peak oil demand and negative demand growth is likely to occur.

WAM believes this will happen more quickly than the oil industry expects it to, with demand growth falling below 1% by 2018 and becoming negative by 2020.

Jochen Wermuth, Founding Partner, Wermuth Asset Management, ahead of OPEC’s November meeting, said: "If we look at the OPEC, Saudi Arabia and Russia are its most important players.

"These are economies that could, if they wanted, lead the field in terms of diversifying energy resources.

"In the Middle East, Dubai has been the most innovative on solar power.

"The other Emirates may soon follow, along with other GCC countries that benefit from a lot of sun.

"Without efforts to diversify, we expect to see countries such as Russia struggle in future years.”