Damien Courvalin, Goldman Sachs’ head of energy research, said last week that oil prices would remain at high levels in the years to come as demand improved amid tight supply. The investment bank expects Brent to hit $90 per barrel by the end of 2021 and close to $85 per barrel for the next several years. Courvalin said that the current deficit in the oil market is the deepest in decades as underinvestment curbs upstream output.
Goldman Sachs also expects oil demand from the transportation sector to plunge after 2025. Rising electric mobility and tighter emission regulations are expected to slash oil demand from the transportation sector. At the same time, remote working is expected to continue after the pandemic, reducing the need for commuting. The investment bank said passenger vehicles accounted for 43% of total oil consumption.
However, petrochemicals are expected to emerge as the new baseload for oil demand. Goldman also expects the growth of oil demand in developing countries to push a peak in consumption beyond 2030. Other forecasters have predicted an earlier oil demand peak. BP and Shell said oil demand might have peaked. The IEA said demand could peak within ten years around the mid-2030s. On the other hand, OPEC projects a later demand plateau by 2040.
