Global energy markets forecast – October 2020

We are pleased to publish our latest global energy markets forecast. Along with substantial commentary on key markets and policy movements, the report presents our annual outlook to 2050 for global energy markets in the post-COVID-19 world.

Key highlights of the report include:

Market Developments

  • Global energy demand tumbled in Q2 2020 as a result of the Coronavirus pandemic and containment efforts, however it started to slowly recover as restrictions lifted and economic activity gradually resumed
  • Mobility restrictions triggered a collapse in oil demand and a crash in crude oil prices, which led to production cuts from global major crude producers. Global oil production increased slightly over the summer in response to an oil price rebound, as demand recovered to some extent after restrictions have been relaxed
  • Even if the Coronavirus impact on global gas demand was relatively moderate, gas prices fell to historic lows, primarily due to an already oversupplied market. Continued low gas prices resulted in production shut-ins in major producer countries
  • Coal imports in Asia substantially dropped as a result of intensifying coal-gas competition and imposed import quotas in China

Central Forecast

  • Global primary energy demand increases by 19% between 2020 and 2050, but grows at a slower rate compared to the April 2020 forecast primarily driven by weaker economic outlook
  • Carbon emissions rise to a peak at 33.6 Gt by the mid-2030s –15 years earlier and 8% lower compared to the April 2020 update – and then plateau for the rest of the forecast. This is primarily driven by a downward revision to global economic growth
  • Brent crude oil prices reach a high of $70 Mbb/d by the mid-2030s as decreased investment into new capacity, and continued production adjustments by OPEC lead to tightening oil markets. But a slow growth in the global economy, combined with accelerated EV penetration in the long-run result in a fall in crude prices to $61 Mbbl/d by 2050
  • Global gas prices rebound in the mid-2020s and then continue to increase across the forecast with robust global demand growth. In Europe, gas prices grow at a slower rate from 2040 onwards compared to Henry Hub and Japanese gas due to a rapid renewable penetration in power and fuel substitution in residential heating, putting downward pressure on European gas demand
  • Coal prices gradually rise to $68/tonne by the late 2030s due to production capacity reductions as a result of the current price slump and then fall to $66/tonne in 2045 as stringent climate-change policies bite coal consumption

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