BAKU, Azerbaijan, Dec.2
By Leman Zeynalova – Trend:
Fuel demand is expected to recover over 2021-2022 flattered by base effects, but beyond this, growth rates will soften, Trend reports citing Fitch Solutions.
“The pickup in consumption will help to push prices higher over the five-year forecast period, although bloated crude inventories, the unwinding of the OPEC+ production cuts and return of barrels from Libya, Iran and the US provide downside pressure over the medium term. That said, the global growth outlook beyond 2021 is not bearish and global real GDP growth will continue to spur demand for oil. However, slower economic expansion – led by structural deceleration in the US and China – will weigh on the pace of growth, combining with longer run trends towards rising energy efficiency, falling energy intensity and the shift towards low-carbon alternative fuels. Of the 25 largest oil consumers globally (which together account for over 80 percent of global demand), 18 are set to see significant slowdowns in their ‘fuel demand’ growth over the coming five years. For the group as a whole, we forecast net demand growth over 2020-2024 to be only 26.1 percent of the growth that was registered over 2015-2019.
“The global Covid-19 pandemic has accelerated the energy transition initiatives among global markets, and will likely entail pre-emptive policy rollouts and adjustments in demand patterns away from fossil fuels over the coming years. A number of Asian markets such as China, South Korea and Japan have followed adopted similar green energy to countries in Europe and North America, committing to more ambitious carbon reduction targets and providing plans to boost investments into renewable, greener energy sources. Fuel demand is expected to enjoy several years of growth after emerging from Covid-19 lows, although multilateral efforts to curb emissions and promote fuel switching across industries to greener alternatives could very well erode demand much sooner than we currently forecast,” the company said.
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