Jan 25, 2017
BP warns of price pressure from long-term oil glut
The world is facing a long-term oil glut as producers scramble to exploit reserves before fossil fuel demand goes into decline, according to BP assessment that suggests oil companies should brace for prolonged pressure from low prices. The UK oil and gas group said there is twice as much technically recoverable oil available as the world is expected to need between now and 2050, making it likely that some oil reserves will never be extracted. Pricing pressure is likely to come from the supply side, due to strong growth in US shale oil, and the demand side as the rise of renewable energy, including electric vehicles, gradually slows growth in oil consumption. BP cited estimates that there are 2.6 trillion barrels of oil recoverable using current technology, more than twice cumulative global oil demand to 2050 under most scenarios. BP said plentiful supply would help keep fossil fuels the dominant source of energy powering the world economy for decades to come, with oil, gas and coal projected to account for three-quarters of energy supply in 2035.
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