Goldman Sachs expects oil demand to hit record highs in 2022, 2023

The Goldman Sachs logo is seen on the floor of the New York Stock Exchange (NYSE) in New York, New York, U.S., November 17, 2021. REUTERS/Andrew Kelly

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SINGAPORE, Dec 17 (Reuters) – Goldman Sachs expects average global oil demand to reach record highs over the next two years due to rising demand in aviation and transportation, as well as in the construction of infrastructure.

“You already had record demand just before this latest variant and you’re increasing the demand for jets and the global economy continues to grow,” Damien Courvalin, head of energy research at Goldman, told reporters.

“You will see how we will average a new demand record in 2022, and again, in 2023.”

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While the recovery hit a speed bump as COVID-19 cases spiked in parts of the northern hemisphere over the winter, lockdowns remained limited, Courvalin said. High-frequency mobility data also showed limited impact, he said.

Goldman forecasts steady growth in global oil demand through the end of this decade at around 106 million barrels per day (bpd), as it expects only a gradual energy transition.

Electric cars will reduce gasoline demand, but trucks and planes are still a long way from decarbonization, Courvalin said.

“You’re selling almost 6 million EVs (electric vehicles) a year now. That’s still less than 100,000 barrels per day of demand destruction in a 100 million barrel per day market, so it’s still a little piece.”

For electric fuels, mild temperatures this winter and the ramp-up of coal production at China’s top producer and consumer have capped liquefied natural gas prices in Asia, Courvalin said.

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Reporting by Florence Tan and Gavin Maguire; edited by Richard Pullin

Our standards: The Thomson Reuters Trust Principles.

Steve R. Hansen