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BP Ignores Oil Market Fundamentals In Latest Energy Outlook

BP Ignores Oil Market Fundamentals In Latest Energy Outlook

Peak demand has been on the oil industry’s radar for some time but mainly as a distant event with vague implications. BP tried to change that last month with a bearish long-term forecast for oil demand that said peak demand is either here now or will arrive in the next few years.

The UK oil major has made a cottage industry of its long-term Energy Outlook, which is eagerly awaited by oil and gas companies for its insights about future supply-demand trends. However, the overall response this time from most in the industry was that BP jumped the shark.

It’s true that the Covid-19 pandemic has stunted oil demand — and continues to do so — but to suggest that the market won’t recover to its pre-virus growth trajectory is quite a leap. One only has to look at BP’s new business strategy to see what is more likely driving the forecast. 

Along with several of its European peers, BP aspires to “net-zero” carbon emissions by 2050 and plans to shift investment away from its core oil and gas operations to low-carbon and renewable energy projects in the coming years. 

Under its plan to become an “integrated energy company,” BP will boost its low-carbon spending to $5 billion annually by 2030 while reducing oil and gas production by at least 1 million barrels of oil equivalent per day from 2019 levels. That

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