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Oil Demand Peaked in 2019 - BP

https://www.cnn.com/2020/09/14/business/bp-oil-demand-peak-coronavirus/index.html

"Demand for oil may have peaked last year, according to BP, which says the global market for crude might never recover from the coronavirus pandemic.....In a new report published on Monday, the company lays out three scenarios for energy demand, all of which forecast a decline in demand for oil over the next 30 years....."

More   https://finance.yahoo.com/news/bp-says-era-oil-demand-230100653.html

yogibearbull_0-1600108024006.jpeg

 

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Frequent Contributor

Re: Oil Demand Peaked in 2019 - BP

 First buggy whips, now oil? What's an investor to do? Diversify!

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Re: Oil Demand Peaked in 2019 - BP

Global demand for oil is down 20% in the last 12 months. There can’t be a global economic recovery without an increase in fossil fuel use because too many economies need it to grow.

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Re: Oil Demand Peaked in 2019 - BP

Demand for oil falls over the next 30 years,” BP said in the report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”

Covid Impact

The pandemic shattered oil consumption this year as countries locked down to prevent infections from spreading. While demand has since improved, and crude prices with it, the public health crisis is still raging in many parts of the world and the outlook remains uncertain in the absence of a vaccine.

The impact, including lasting behavioral changes like increased working from home, will affect economic activity and prosperity in the developing world, and ultimately demand for liquid fuels, according to BP. That means it won’t be able to offset already falling consumption in developed countries."

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Re: Oil Demand Peaked in 2019 - BP


@Bentley wrote:

Demand for oil falls over the next 30 years,” BP said in the report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”

Covid Impact

The pandemic shattered oil consumption this year as countries locked down to prevent infections from spreading. While demand has since improved, and crude prices with it, the public health crisis is still raging in many parts of the world and the outlook remains uncertain in the absence of a vaccine.

The impact, including lasting behavioral changes like increased working from home, will affect economic activity and prosperity in the developing world, and ultimately demand for liquid fuels, according to BP. That means it won’t be able to offset already falling consumption in developed countries."


If you really believe there will be a long term reduction in liquid fuels you could make beaucoup bucks selling energy  companies short over the next few years. Its a no brainer, right? But you won’t do it. You will plod along with VTI.

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Re: Oil Demand Peaked in 2019 - BP


@Intruder wrote:

@Bentley wrote:

Demand for oil falls over the next 30 years,” BP said in the report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”

Covid Impact

The pandemic shattered oil consumption this year as countries locked down to prevent infections from spreading. While demand has since improved, and crude prices with it, the public health crisis is still raging in many parts of the world and the outlook remains uncertain in the absence of a vaccine.

The impact, including lasting behavioral changes like increased working from home, will affect economic activity and prosperity in the developing world, and ultimately demand for liquid fuels, according to BP. That means it won’t be able to offset already falling consumption in developed countries."


If you really believe there will be a long term reduction in liquid fuels you could make beaucoup bucks selling energy  companies short over the next few years. Its a no brainer, right? No it is not a no brainer and nuts to attempt to try to pick when and who to short. But you won’t do it. Who would? You will plod along with VTI. Plodding along with an average annual return of nearly 14% every year over the last decade and absolutely no need to attempt to outperform. Those who have been fortunate enough to be among the top earners, savers and managed their money well have no need to come up with crazy strategies to outperform; but to each their own. From an experienced and successful expert in the oil business; “Demand for oil falls over the next 30 years,” BP said in the report. “The scale and pace of this decline is driven by the increasing efficiency and electrification of road transportation.”

Stay safe

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Explorer ○

Re: Oil Demand Peaked in 2019 - BP

Well, I had to read the BP article.  Which I did. Folks - this is a think tank piece.  Which is valuable to the discussion.  No one can argue it would be a beautiful world without Co2 emissions.  One day it will get there if the politic is willing and focused.  The article states that all of the scenarios put forward will be wrong - but keep the discussion going, think about alternatives.  

Intruder has a point - if you believe fossil fuels are imminently doomed, an investor could make a killing. I think if you live in a third world country for any length of time,  you will see that their societies have a ways to go on Maslow’s hierarchy to be driving electric vehicles. 

As far as market returns of 14%, that has been a beautiful thing.  I think the key is that an investor believes they can’t beat the market, so accepts the average return.  It is just luck it has been 14% for that percentage of the portfolio in the market index.  Nothing more than that.  As long as an investor has stayed in the market and been diversified, I am guessing they have done pretty darn well the last 10 years.  Might go on for another 10 years, might not.  

Now, who on this forum, doesn’t diversify?  If so, please diversify in whatever meaningful way that calls to you.  Do not put all your eggs in one basket.  Old sayings are just that for a reason.

Back to the BP article - the minute that battery or some other technology advances to a point where holding a charge is truly efficient will be revolutionary. Right now, I forget to charge my iPhone overnight and I’m at 3% the next morning.   Then of course there are the subsidies for all this alternative energy to factor in.  I think it’s great, but something to be aware of.  Kenya isn’t going to be doing any subsidies or tax credits. 

Things are changing, thank goodness, but keep it in context. 

 

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Re: Oil Demand Peaked in 2019 - BP


@Slooow wrote:

 

Intruder has a point - if you believe fossil fuels are imminently doomed, an investor could make a killing. How so? Do you believe you could beat those with better and more timely information than you possess to the broker's window? I think if you live in a third world country for any length of time,  you will see that their societies have a ways to go on Maslow’s hierarchy to be driving electric vehicles. Do you believe the authors of the study did not account for your revelation? Do you have any evidence to refute the study?

As far as market returns of 14%, that has been a beautiful thing.  I think the key is that an investor believes they can’t beat the market, so accepts the average return.  Actually the key is the understanding that it is possible to outperform the maket, just not probable. It is just luck it has been 14% for that percentage of the portfolio in the market index.  Nothing more than that.  As long as an investor has stayed in the market and been diversified, I am guessing they have done pretty darn well the last 10 years. Might go on for another 10 years, might not.  

Now, who on this forum, doesn’t diversify?  I'll send you a private e-mail if you want to know, several posters come to mind. If so, please diversify in whatever meaningful way that calls to you.  Do not put all your eggs in one basket.  Old sayings are just that for a reason.

 


 

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Re: Oil Demand Peaked in 2019 - BP

Anyone buying XLE, VDE or fossil fuel energy stocks to capture the post covid bounce?

Or you think it is already baked into the prices?

 

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Re: Oil Demand Peaked in 2019 - BP

 Everything that is known or forecastable is baked into current pricing.

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Contributor ○

Re: Oil Demand Peaked in 2019 - BP

Ok then i will stay away from fossil fuel companies. Risk is too high. It is a declining industry.

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Re: Oil Demand Peaked in 2019 - BP

Tesla - the ultimate ESG company - wait for it to join TRILLION $ company club by next year, furthering downfall of 'Carbon' companies - Energy is just 2-3% of SPY, will go further down and all index investors will own less of them.

'Carbon' believers are buying QQQ & TESLA, NOT shorting TESLA.

 

 

 

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Re: Oil Demand Peaked in 2019 - BP


@waffle wrote:

Ok then i will stay away from fossil fuel companies. Risk is too high. It is a declining industry.


Good call.

OPEC cuts 2020 oil demand forecast, trims 2021 outlook on pandemic fallout
Published Mon, Sep 14 2020 7:40 AM EDT

LONDON — OPEC has cut its forecast for oil demand growth this year, citing a weaker-than-expected recovery in India and other Asian countries, and warned risks remain “elevated and skewed to the downside” for the first half of next year.
In a closely-watched monthly report published Monday, the group of oil-producing nations downwardly revised its outlook for global oil demand to an average of 90.2 million barrels per day in 2020. That’s down 400,000 bpd from the previous month’s estimate and reflects a contraction of 9.5 million bpd year-on-year.


https://www.cnbc.com/2020/09/14/oil-and-coronavius-opec-cuts-2020-demand-forecast-trims-2021-outlook...

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Explorer ○

Re: Oil Demand Peaked in 2019 - BP

Aren’t we in a global recession.......?

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Re: Oil Demand Peaked in 2019 - BP

My company in Energy business has been having lay-off after lay-off since 2014.

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Re: Oil Demand Peaked in 2019 - BP


@Slooow wrote:

Aren’t we in a global recession.......?


As  I noted previously there has been a 20% decline in demand for fossil fuels In the last 12 months because of the global recession.
there cannot be a global economic  recovery without a large increase in fossil fuel use because that is the only energy source that the developing economies and emerging market economies can afford to grow their economies at the necessary scale to improve GDP.

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Re: Oil Demand Peaked in 2019 - BP

Agree.

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Re: Oil Demand Peaked in 2019 - BP

Doubts on BP's 2019 peak-oil-demand projection,   https://oilprice.com/Energy/Crude-Oil/What-BP-Got-Wrong-About-Global-Oil-Demand.html

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Re: Oil Demand Peaked in 2019 - BP


@waffle wrote:

Ok then i will stay away from fossil fuel companies. Risk is too high. It is a declining industry.


And what will you do when the next global economic recovery Strikes and the price of oil spikes up to $80 + per barrel because developed and emerging market economies demand more imported oil to increase their GDP?

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Re: Oil Demand Peaked in 2019 - BP

IF there is economic recovery, commodities [Dr Copper, iron-ore, oil, etc] will participate. DJIA and SP500 are proxies for that.   https://www.cnbc.com/2020/09/18/world-economy-infrastructure-led-recovery-could-send-commodity-price...

Nasdaq is fine but that isn't the real economy.

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