Top energy executives have warned that oil prices at a 14-year high are poised to cut fuel demand in the wake of the Covid pandemic as consumers react to rising pump and electricity prices. by reducing spending and travel, top energy executives have warned.
Lobal oil futures hit $139 a barrel this week as gasoline, diesel and electricity prices hit multi-year highs. The increase comes as oil buyers shun goods from the world’s second-largest oil exporter, Russiaabout its invasion of Ukraineexacerbate existing shortages of oil and natural gas.
Energy executives attending the CERAWeek energy conference in Houston said prices are approaching levels that could dampen demand. And consumers, now paying 47pc more than a year ago for gas, agree.
“There’s always a budget, right?” Adam Bielawski said, is refueling at a gas station in Toronto.
He added: “Gas is a necessity, isn’t it, noting that he will soon face a longer commute that may require tightening his belt.
Andy Brown, chief executive officer of Portuguese energy company Galp Energia, agrees.
“There’s a chance we’ll have demand destruction,” he said at the CERAWeek energy conference, as the recent spike in prices affected the fuel. Galp, an oil and gas producer turning to renewable fuels, is concerned that prices will dampen attention in the shift to clean energy, he said.
Rising gasoline and diesel prices have added pain to consumers in Europe, already struggling with rising electricity bills.
On Monday, the wholesale price of electricity in Spain hit 500 euros per megawatt-hour, Repsol CEO Josu Jon Imaz told conference attendees, a rush-hour record and double the month’s level. twelfth.
“We can’t sustain these prices,” Mr. Imaz said. “We need a (energy) transition, not an annihilation.”
Hess CEO John Hess has called on the US and the International Energy Agency (IEA) to coordinate the release of 120 million barrels of oil and commit to similar releases in the coming weeks.
“This is an emergency, and lamenting that 60 million barrels that have been released from strategic reserves is not enough,” he said.
“The current prices are not sustainable,” said Muhammad Taufik, CEO of Malaysian state-owned oil company Petronas.
Worries about culling demand due to sky-high prices have surfaced in recent days as disruptions to Russian exports have left the global oil market short of supply.
The IEA, which advises countries on energy supply and policy, last month raised its forecast for this year’s oil demand on expectations of continued economic growth in the wake of the coronavirus pandemic.
It raised its 2022 forecast to nearly 800,000 bpd, predicting an additional 3.2 million bpd in demand this year, much higher than pre-pandemic 2019 levels of 100 million bpd.
However, experts warn, meeting that demand without Russian energy supplies is unlikely. OPEC Secretary General Mohammad Barkindo said there is not enough spare capacity worldwide to make up for the loss of Russian oil.
Analysts at JP Morgan and Bank of America have predicted oil could hit $185-200 a barrel if Russian oil exports are shunned.
US lawmakers have called for a ban on Russian oil, but President Joe Biden’s administration only sanctioned Russian tankers, prompting traders and refiners to avoid supplying Sovcomflot’s tankers. Russia.
Britain and Canada also banned Russian ships or oil from docking in their ports to protest Moscow’s invasion of Ukraine. Russia calls its actions in Ukraine a “special operation”.
U.S. and Canadian oil advocates have urged Biden to stop advocating renewables over fossil fuels, renewing pipeline projects and skipping drilling auctions. gas.
The Russian invasion is now approaching the end of its second week and so far, Ukraine’s armed forces and cities have organized better than many expected, raising the prospect of a protracted conflict. .
https://www.independent.ie/business/world/relentless-surge-in-energy-prices-is-putting-the-covid-economic-recovery-under-threat-41424020.html Continually rising energy prices are putting the economic recovery of Covid at risk