Oil demand is at an all-time high, but accredited investors are wary of this temporal peak. Since all non-renewable resources are finite, oil reserves are bound to exhaust one day. This has initiated a debate about the economic future of the oil drilling and gas industry.
Future Demand for Oil
The ‘Energy Demand Varies by Sector’ graph has revealed that the oil demand will maintain a lead among other commodities till 2040. This graph takes into account multiple variables, such as the current growth curve and potential energy alternatives.
While renewable energy sources are sought for electricity generation, oil and gas are expected to rule by and large over all sectors in the future. Let’s look at more in-depth analysis.
Petroleum Products
The downstream industrial uses of oil are not just as fuel for energy generation. Petroleum products can be seen on store shelves, in pantries, inside fridges, and other plastic products. Anything that’s not 100% recycled is sourced from oil and gas feedstocks.
The United Nations has predicted that the world’s total population will increase to 11.2 billion in the next 80 years. From where the world stands today—at 7.7 billion humans and that many lives to sustain—there’s petroleum-based plastic everywhere. As the population grows, the demand for consumer goods is bound to grow with it.
Surplus and Falling Prices
From what the environmentalist propaganda shows us, people are concerned about the oil supply for valid reasons. Oil companies have been over-producing for a while, which runs the risk of exhausting all present oil reserves. This has also painted a gloomy picture for the oil market because there’s excess supply, and the surplus is building a downward pressure on oil prices.
However, every economic theory testifies that such periods rarely ever stay stagnant; a boom will follow a slump, and equilibrium will replace the current surplus. As for businesses, they’ll prosper if they’re prepared for an oil-dominated future.
Make sure your company has an oil management software to optimize workflow, reporting, scheduling, and delivery.
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