energyaspectsolivestreet

How strong oil demand will keep prices above US$100 a barrel despite recession fears

2022-12-28T18:43:06Z

Amrita Sen’s OPED in The Globe and Mail

Fears of a recession are dominating the market, raising questions around the potential impact on oil demand and inventory, and ultimately, its price.

There’s been a dramatic sell-off of energy stocks recently – in fact, the worst sell-off since March 2020, according to Bloomberg LLP. So, it’s understandable that investors have fears about a correction with such elevated price levels. But this isn’t cyclical – it’s a structural bull market.

If there’s a recession, oil prices will move down slightly, but the supply versus demand gap is so large that it’s unlikely that prices will go below US$90 a barrel, or, at best, US$80. It won’t hit the lows seen in the past cycle.

This op-ed is written exclusively for The Globe and Mail and will interest all energy participants, particularly North American and Canadian market players.

Read the full story here

Global Petrochemicals Margins Dashboard

2022-12-28T18:42:35Z

Petrochemicals play an outsized role in the global refining industry. But how can you tie them better to your bottom line?

The global energy market continues to find itself plagued by surpluses and shortages. High petrochemicals demand during last year’s lockdowns raised light ends yields, but this left the market severely tight on jet fuel amid this year’s pent-up travel demand. Conversely, the sudden shutoff of Russian exports has jolted global liquefied petroleum gas (LPG) and natural gas liquids (NGLs) markets, further eroding margins for plastics manufacturers across Asia, who will soon be clamouring for new feedstocks wherever they can be found.

The diverse nature of the petrochemicals sector means that changes in supply and demand for these materials will have far-reaching consequences on other sectors. Whether you are a producer, refiner, airline or manufacturer (or someone who trades in between), keeping a tab on how global petchems supply and demand trends translate into producer margins will enable you to identify profitable trading and investment opportunities across the oil products value chain.

We offer extensive coverage of global LPG and NGLs markets, including global supply and demand factors, price forecasts and analysis of key market drivers. Drawing from proprietary datasets and house-built models, our global team of analysts develops a complete overview of the current state of the LPG and NGLs market and uses it to forecast where it will head in the short and medium term.

Find answers to questions such as:

Why is NGLs demand weakening?
How will the loss of Russian supply affect downstream demand?
How will new infrastructure in the Gulf of Mexico affect producers in Asia and the Middle East?
And more

Top of the barrel, top of the mind

Petrochemicals demand typically forms the lynchpin of how propane and naphtha distillation interacts with markets for the by-products of these processes. To enable market participants to have greater access to the data that inform our views, we recently launched a Petchems Margins Dashboard that gives you a complete overview of how historic and current trends across petrochemical derivatives are playing out around the world.

With data going back to 2014, the interface allows clients to see the economic performance of products such as ethylene, styrene, propylene and polypropylene as well as the potential returns from processes like propane dehydrogenation (PDH) and steam cracking. The dashboard enables you to track medium-term trends across multiple geographies, namely the US, Northwest Europe, Asia and the Middle East.The dashboard is updated weekly to keep on top of key trends and market changes.

Check out our demo video to learn more about the global petchems dashboard.

’ LPG and NGLs coverage cuts through the noise of this highly diverse sector to show how the developments of today will create trading and investment opportunities for the future.

To learn more about our LPG and NGLs service offering and Petchems Margins Dashboard, contact us today.

Recession Fears + Energy Investing

2022-12-28T18:41:45Z

Energy webinar

Amrita Sen joins Eric Nuttall, Senior Portfolio Manager on the Ninepoint Energy Fund and Ninepoint Energy Income Fund, to discuss the impact of the recession on oil demand, inventories, and price.

Watch this insightful webinar in which Eric and Amrita take an in-depth look at the energy elephant in the room: what happens to the energy investment thesis in a risk-off environment?

They cover:

What would the impact of a recession be on oil demand and oil price?
Can oil inventories still continue to fall if oil demand growth slows?
What is being priced into energy stocks? Is the oil Party over?

The end of equivocation?

2022-12-28T18:41:16Z

Russia miscalculated on its war’s speed; West may be doing so with transition?

Until the Russia–Ukraine War, governments were largely concerned with balancing two incompatible goals: keeping energy cheap while supporting the production of low-carbon alternatives that policymakers had hoped would one day be able to compete with oil and gas on their own.

Left unsaid was the challenge of how this goal will be achieved, especially on a timeline of less than 30 years. That was a problem for the next decade’s leaders. The collapse of Europe’s energy relationship with Russia has demolished the hope of keeping energy cheap.

So does this mean expensive renewables will get even less support moving forward? Or will higher energy costs instead become easier for politicians to swallow?

Recently, we released a pragmatic review analysing how Western sanctions on Russian energy supplies will affect global efforts toward decarbonisation.

The economic and political impacts of Russia’s invasion of Ukraine have shifted the balance of power in the energy “trilemma” that faces policy experts and decision makers, as previously assumed Russian energy supplies have evaporated. This has triggered a rapid evolution in the relationship between environmental sustainability, energy costs and energy security, which form the three pillars of transition policy and investment debates.

Visit here to read the full report .

' Trading the Transition service

2022-12-28T18:40:48Z

is excited to announce the launch of Trading the Transition , our new service that analyses how the outlook for the decarbonisation drive over the next decade is affecting today’s energy landscape.

Although the transition to net-zero emissions is a multi-decade effort, governmental policies and investment decisions by market actors are already having an impact on energy markets. The effects of these deep trends on tradeable markets will only be further amplified in the future.

Understanding the massive swings in energy supply and demand taking place will enable market participants to confidently plan for the years ahead, especially as capital allocations shift in response to market signals. Traditional supply sources will still be needed well into the future, but renewables will take big bites out of demand in places, causing energy markets to pull in many directions at once. Policies seeking to guide the speed and direction of the transition will only amplify the challenge.

While there is increasing awareness of climate targets and long-term policy solutions, we seek to identify the energy transition’s short-term challenges and analyse how these are shaping markets right now. We explore the contours of the energy transition’s outlook over the next 5–10 years, with a focus on:

Global decarbonisation trends and what they mean for today’s markets.
Policy and regulatory developments that will affect the demand, supply and pricing of traditional liquids products over the medium term.
How technological developments in hydrogen, CCUS, biofuels, EVs and other areas will influence market dynamics.

We aim to help you make informed trading and investment decisions amid the rapid shifts taking place. We’re excited to see what the future will bring.

Discussion with Haitham Al-Ghais, OPEC's Secretary General-elect

2022-12-28T18:38:17Z

discusses oil markets and the energy transition with His Excellency Haitham Al-Ghais, OPEC's Secretary General-elect.

We are excited to present His Excellency Haitham Al-Ghais' first detailed interview since his election as OPEC's next Secretary General in January 2022.

His Excellency is a veteran of the Kuwait Petroleum Corporation and brings over three decades of global oil and gas industry experience. He has held several positions in key OPEC and OPEC+ bodies and committees, including as Kuwait’s OPEC governor from 2017 to 2021 and the inaugural chairman of the OPEC+ Joint Technical Committee in 2017.

As he gets ready to take office in August 2022, Director of Research Amrita Sen and Head of Geopolitics Richard Bronze ask His Excellency Al-Ghais about his new responsibilities and his objectives, including the future of OPEC+ beyond the end of this year.

They dive deeper into the challenges that OPEC and OPEC+ will have to navigate, including the impact of the energy transition on markets, relations with oil consumers and maintaining consensus among producers.

Global NGLs market: five-year outlook

2022-12-28T18:21:58Z

Webinar

In this webinar, our analysts cover some of the key topics encompassing global NGLs supply, including:

Decoupling NGLs output from crude production.
How the US and the Middle East will continue to drive global NGLs supply growth.
The impact of Iran’s return on the NGLs market.
Sector-specific NGLs demand forecasts for the short and medium-term.

Access the on-demand webinar using the link below:

COP26: What’s expected

2022-12-28T18:21:31Z

Anticipation for the 26th annual Conference of Parties to the UNFCCC (COP26), an international summit where countries and stakeholders discuss climate policy, is building. This year's conference takes place in Glasgow and is scheduled to run from 31 October to 12 November.

COP tends to face grandiose expectations by an audience that wants to see big headlines, but in reality, COP tends to be as much about agreeing on finer policy details as it is on committing to big-picture climate measures.

This year's event is seen as particularly critical because several previously agreed climate pledges were set to have come to fruition by this point. At the same time, global leaders are under pressure to address high energy prices—even as this conference pushes them to meet still more ambitious climate targets.

This year's COP seeks to make progress on three key issues:

1. Finalising the Paris Agreement rulebook, particularly Article 6

The bulk of the Paris Agreement’s rulebook was agreed at COP24. But detailed rules relating to Article 6—the use of market and non-market tools as part of compliance strategies—have been difficult to establish. In essence, this is about the role of carbon offsets, under which abatement made in one country is paid for and used for compliance by a different country.

Agreeing the detailed rules for Article 6 would pave the way for countries to use international offsets to meet national climate targets, and it could provide the foundation for a new UNFCCC international carbon offset mechanism for use under the Paris Agreement. It would let policymakers use international offsets for compliance in domestic trading schemes. This would allow the offset market to scale up with private money and commoditise itself in ways unlikely to happen without such an agreement in place.

The rule would also stimulate a larger international market for offsets by introducing sovereign buyers to the mix. While we do not think the EU will allow offset use in its ETS—at least not before 2030—the airline industry’s offset scheme (CORSIA) needs such rules to be in place for it to have any degree of environmental integrity.

2. Agreeing on financial support provisions to developing countries

COP15 established that OECD countries would mobilise $100 billion every year in climate finance by 2020 to help developing countries adapt to and mitigate further climate change. However, the conference did not formalise details on how individual countries would pay for the scheme, instead relying on each country's own financial pledges.

COP26 will first look to ensure that countries adhere to their existing pledges, and formal negotiations are expected to start on post-2025 finance goals. With OECD nations not yet having stumped up $100 billion for the fund, there seems to be a significant gap between what the developing world wants and what the developed world will offer.

3. Encouraging countries to advance net-zero targets

The UNFCCC will continue to call for more ambitious Nationally Determined Contributions (NDCs) at COP26 as most countries are still quite far from delivering on their Paris agreement goals. The NDCs set out a country’s targets for reducing greenhouse gas emissions. Countries will face pressure to create both concrete policies and long-term strategies that will deliver climate neutrality—particularly for G20 nations by 2050.

Australia and Saudi Arabia announced new pledges to reach net-zero emissions by 2050 and 2060, respectively, and China recently released a strategy to achieve a net-zero target that reaffirms previous targets and policies. Most countries tend to announce major revisions prior to these conferences to generate maximum press coverage, so this week could see more announcements than we get during the event.

Big questions on rising energy costs

Global fossil fuel demand is responding far more slowly than supply to growing environmental concerns. Economies recovering from the effects of Covid-19 are pushing energy demand up along with them. A growing world population and expanding middle class will propel global energy consumption still higher.

At the same time, continuing underinvestment in fossil fuel supply will mean higher oil and gas prices in the coming years.

COP will pressure countries to take more action. However, if governments are serious about alleviating the most severe effects of climate change, the focus cannot just be on legislation that shifts supply. They must also tackle demand.

Read our recent views on rising energy costs in the Financial Times, where our Director of Research Amrita Sen offers a detailed take on the need to address fossil fuel demand in order to ensure a smooth and equitable energy transition.

The energy markets are going through a massive transformation. To access our research across various energy markets, write to us at contact@energyaspects.com or request your trial here .

global NGLs supply data service

2022-12-28T18:21:03Z

Natural gas liquids (NGLs) sit at the crossroads of the global energy industry, connecting the oil, natural gas, oil products and petrochemicals markets. NGLs serve as a feedstock in the petrochemicals sector, as fuel for home heating and cooking, and as autogas in cars, busses, and other modes of transport. Meanwhile, refineries consume NGLs like butane and yield LPG in order to meet various seasonal gasoline specifications.

The deeply important role NGLs play in the wide range of markets that require them means that effectively forecasting global NGLs supply trends requires a multi-pronged approach.

With this fundamental understanding, and by identifying missing links within the global NGLs market, we have recently rolled out significant enhancements to our NGLs data service, including:

NGLs global supply data forecasts by purity product and by country.
Global gas plant supply by purity product and by country.
Refinery NGLs production by purity product and by country.
Granular US supply and production data broken down by PADD.

In addition to this service, we offer five-year supply forecasts for ethane, propane, butane, LPG and C5+.

’ NGLs data service is one of the most comprehensive in the market, offering users coverage of purity products and supply forecasts that are updated monthly by drawing extensively from our expertise in analysing sectors across the energy value chain —upstream, midstream and downstream. We also provide deep granularity in our data, including distinctions between refinery and gas plant production, to promote transparency regarding supply sources and keep potential buyers well informed about future feedstock purchasing decisions.

Overcoming data limitations in the global NGLs market

Upstream : The NGLs market lacks standardised reporting and holistic visibility, but we have found that the basis for all future NGLs supply can ultimately be linked to the global outlook for gas supply. As such, we tie our NGLs supply projections back to our forecasts for natural gas production as well as for production of crude oil in countries with large amounts of associated gas.

We also assess the liquid content of natural gas from each region we analyse, which can vary by field and basin within a country, to determine the production ratios between natural gas and NGLs. For example, associated gas contains more liquid than non-associated gas, and therefore produces greater of NGLs.

Midstream: We have employed an infrastructure-based approach to verify aggregated production data for countries or regions that lack timely data. Specifically, this involves assessing various infrastructure that connects wellheads to gas processing plants.

Operators in many countries successfully employ new technology to enhance efficiencies at existing plants, which allows for greater NGLs extraction. Therefore, we model capacity creep in ways that go deeper than monitoring announced projects for capacity expansion, by basing our analysis on historical trends as well as expected uptake rates for future technologies.

Downstream: Where data on refinery NGLs output are not readily available, we use our country-specific refining model to assess LPG yields based on typical crude diets and refinery configurations. Yields typically swing in a range of 2–8%, depending on the complexity of the refinery.

Furthermore, we draw from our global steam cracker and propane dehydrogenation (PDH) unit databases to aggregate the domestic feedstock needs of a country’s petrochemical sector, allowing our analysts to provide a further layer of back-testing to our supply forecasts.

To find out more about our NGLs supply data service, write to us at sales @energyaspects.com or visit here to access our modelling methodology and assumptions, which details the underpinnings our global NGLs supply forecast.

Additional resources: Global NGLs market: five-year outlook webinar

Fit for 55 – driving the energy transition

2022-12-28T18:20:34Z

European Green Deal - Fit for 55

The much-anticipated legislative proposals for the European Green Deal, the “Fit for 55” package, have been published and are the centrepiece of the EU’s efforts to kick-start the energy transition.

A theme running through these proposals is the expansion of carbon pricing to more sectors and possibly more geographies.

In this 30-minute webinar Trevor Sikorski, ’ Head of Natural Gas and Emissions, and Matt Parry, Head of Long-term, are joined by Amrita Sen, Director of Research, to discuss:

The European Green Deal proposals.
What we think might change as the proposals progress through the EU legislative process.
What this means for the main environmental and energy markets.

Decarbonising the US Power sector

2022-12-28T18:19:55Z

State level effort not enough to achieve national climate goals

US carbon dioxide emissions will decline by only one-fifth by 2030 unless significant action is taken. This rate is far below the US’ latest pledge to cut greenhouse gas emissions by up to 52% by 2030, which the country set after rejoining the Paris Agreement. Reductions continue to be led by efforts at the state level, and these are poised to expand further this year, but we are sceptical on whether they will be sufficient to push the US to its stated goals.

On 22 April, US President Joe Biden announced ambitious country-level climate goals as various countries review and enhance their climate change commitments prior to the UN Climate Change Conference (COP26) in November, committing to innovation in renewable energy sources and investment in clean energy technology. The targets set out in the nationally determined contribution will align with the Biden administration's goal to decarbonise the US’s electricity sector by 2035.

US Power sector: Reduction estimates

Reductions can seem steeper compared to 2005, which was one of the five highest years of power sector emissions in the past 30 and top two for a total output of greenhouse gases (see Figure 1) . Emissions have remained lower since then, and thus reductions from the 2005 level are not as onerous as those from 1990 (the Kyoto Protocol baseline) or even from more recent years such as 2019.

Our analysis indicates that the US will reach a 40% reduction in power sector emissions by 2030 and a 21% drop in overall energy-related emissions below the 2005 baseline. We base our reductions forecasts on our proprietary models that track expected continued coal plant retirements, renewables growth and the quickening pace of electric vehicle adoption.

These estimates are below the rates that the US seeks to achieve, causing us to question whether the country can meet the aggressive climate targets it has set out— especially its ambitious target to fully decarbonise the US power grid by 2035.

The current state of affairs

More than a dozen US states either have implemented or are enacting CO2 limits. The 11 current members of the Regional Greenhouse Gas Initiative (RGGI) have pledged to cut power sector emissions further after already having seen reductions of more than 43% since 2005.

The possible addition of Pennsylvania, Illinois and North Carolina to RGGI would push the programme to cover more than 38% of US power consumption. However, those states' share of total US emissions is currently below their electricity usage as coal plant retirements over the past decade along with increased renewables penetration have already propelled them into greener territory.

However, New York and California continue to be at the forefront of state-level efforts to reduce emissions. New York adopted one of the country's most aggressive climate bills in 2019 with the signing of the Climate Leadership and Community Protection Act (CLCPA), which calls for a 40% cut in emissions by 2030. Additionally, California extended its initial targets to achieve a 40% reduction from 1990 levels by 2030, which would amount to a 44% drop from 2005 levels.

Our analysis shows that most of the near-term emissions limits will continue to be driven by states in the US Northeast as well as another 10 or so spread throughout the country that have either statutory or executive long-term renewables and carbon-neutrality targets. Reductions by these states alone will be insufficient to meet overall US goals. Given the tight balance of power in the US Congress, implementing more aggressive climate goals may require even more intense policymaking at the state level.

Medium-term and Long-term energy market outlooks

2022-12-28T18:19:29Z

Medium-term and Long-term energy market outlooks

Long-term publication: Client Research Portal demo

Our latest Long-term energy market outlook is a comprehensive report that forecasts the prevailing trends within each of the main energy market sectors through 2040. It also includes a detailed five-year Medium-term outlook spanning the complete energy spectrum, providing data and analysis across the natural gas, coal, nuclear, renewables, oil, oil products and power sectors.

Our Medium-term and Long-term energy markets outlooks are available for the first time in web format through our new client research portal.

This publication provides a holistic country-by-country, sector-by-sector and product-by-product view of the energy markets, and its user-friendly web format allows you to quickly access the sections and topics most relevant to you. We present data in a range of layouts depending on your needs, including easily digestible spreadsheets on demand, supply and macroeconomic forecasts as well as detailed charts and presentations accessible via your laptop, tablet or mobile device.

Some of the key themes covered by this year's long -term publication are:

The impact of COVID-19 on the energy market
The emergence of cost-competitive renewable energy in the power sector
The expanding role of hydrogen in meeting industrial fuel demand
The rapid ascent in EV sales—which includes country-by-country breakdowns on the vehicle fleet forecasts by fuel type through to 2040

We also cover many of these topics in our exclusive podcast series, available to clients on the go.

Watch our short video describing the new Long-term portal and see what our Medium- and Long-term Outlooks have to offer.

Presenter: Stefan Ulrich

Analyst, Long - term

OPEC+ spare capacity

2022-12-28T18:19:09Z

Country-by-country historic and forecast data for each producer in the OPEC+ group

The rapid pace at which the oil market is rebalancing means attention once again is turning to the amount of spare production capacity available to respond to tightening fundamentals. To help investors and decision-makers explore this critical question, we have recently added OPEC+ spare capacity estimates to our crude oil data service.

We now provide country-by-country historic and forecast data for each producer in the OPEC+ group, updated monthly. Our figures go into highly granular detail, taking into account factors such as sanctions, geopolitical disruptions and technical outages to determine how much of a given country’s nominal unused production capacity is actually available to bring online.

Current volumes of spare capacity remain high, which is unsurprising given OPEC+ production quotas remain in place and as Saudi Arabia is voluntarily cutting an additional 1 mb/d of production until at least the end of April. This supply buffer looks particularly comfortable in relation to current global demand, which remains well below pre-pandemic levels. However, we expect spare capacity levels to trend lower over the course of this year as OPEC+ cautiously restores more supply and as the global demand recovery continues to unfold. Even assuming US sanctions on Iran are lifted midyear (which would return 1.5 mb/d of Iranian spare capacity to the market), we forecast OPEC+ spare capacity will fall to 5% of global demand by year-end — still high on a historic basis, but less than half of the June 2020 peak.

The remaining OPEC+ quotas are set to end after March 2022, allowing producers to reactivate much of the capacity that is currently offline, while the demand recovery will continue well into next year. This makes it vital to understand which countries maintain spare capacity and how much production capacity has been eroded by natural declines and underinvestment. Unsurprisingly, our data reveal that Saudi Arabia and its GCC neighbours control the largest share of OPEC+ spare capacity. The OPEC+ agreement also means that at present, Russia, Iraq and several other countries have much more spare capacity than at any previous time, while US sanctions are still severely restricting Iranian output.

But the figures fundamentally show that OPEC+ spare capacity is less plentiful than market consensus assumes, setting the scene for a supply crunch as balances continue to tighten.

Source:

Long-term energy market outlook: The next 20 years

2022-12-28T18:18:44Z

Interview with Matthew Parry, Head of Long-term at

In February, we published our fourth Long-term energy market outlook, a comprehensive report that forecasts the prevailing trends within each of the main energy markets through 2040, including a detailed five-year outlook spanning the complete energy spectrum.

Led by Matthew Parry, Head of Long-term at , the publication is a sophisticated work compiled by our leading experts across the carbon, petrochemicals, power, oil products, refining and supply-side sectors.

Energy market discourse is steadily shifting away from fossil fuels and toward clean energy as decarbonisation takes centre stage. While many governments and businesses are committing to net-zero targets in an aim to make the energy mix greener, our models show that oil demand will peak in the early 2030s. Despite cheaper solar and wind power, a surge in electric vehicles (EVs), and advances in hydrogen fuel and carbon capture technology, our models show that infrastructure constraints will limit the pace of change.

This begs the question of whether the energy transition’s goals are really achievable. How long will oil demand continue to rise? And what will the energy market look like after oil demand passes its peak?

Matthew Parry answers these pressing questions in the interview below, including the role oil majors will play in the energy transition, the likely headwinds facing decarbonisation and his views on how the energy markets will transform over the next 20 years.

The Medium-term and Long-term energy market outlooks provide a comprehensive overview of our forecasts for the periods through 2025 and 2040, respectively. The breadth of time covered by these reports means they touch upon a wide range of subjects.

1. If you were to distil each publication into its main takeaways, what would they be?

The Long-term energy market outlook provides a comprehensive — country-by-country, sector-by-sector and fuel-by-fuel — guide to the evolution of energy markets over the next 20 years. Not only do we provide a detailed analysis of all the impending changes that will engulf energy markets through 2040, but we also look at how each change impacts all of the associated Energy types, providing thorough data sets and clear explanations.

’ Medium-term energy market outlook analyses the specific short- and medium-term transition — i.e. looking at the period through 2025 — tackling how, for example, energy markets will fare in the post-pandemic world and how the energy mix will evolve as emerging technologies, such as EVs, increasingly make progress. The Medium-term energy market outlook (next published in October 2021) also provides a timely update on how the energy market has changed since our last year’s report (published in February 2020), describing, for example, how the GDP outlook has changed and whether the starting point for oil and gas prices is now dramatically different.

2. The reports analyse a broad array of data and trends affecting major sectors in both regional and global economies. How will industry leaders and decision-makers use these reports to inform their market calls and internal deliberations?

These reports give industry leaders and decision-makers a thorough road map for how energy markets will unfold over the next 20 years, allowing them to make timely decisions on how to act today and successfully guiding planning decisions.

3. Governments, industries, and private consumers are all calling for a major push to decarbonise the energy sector and the global economy. What role do you think the oil majors will play as international markets shift toward a greener future?

The energy majors are fully aware of the shifting energy landscape and are acting accordingly to change their future energy mix —increasing investments in renewables and the infrastructure that supports emerging technologies like EVs. Oil will still have an important role to play in the future energy mix, however, as our base case forecast does not show global liquids demand peaking until the early 2030s.

4. This push to decarbonise the global economy will likely face some headwinds. Where do you see these arising, and how do we expect markets will react in turn?

Numerous challenges face the push to decarbonise, ranging from a lack of supportive infrastructure for non–fossil fuel energy growth in many emerging economies, right through to the emergent financial strain that greener technologies, such as EVs, will face as they reach a certain scale.

For example, road financing in many countries is supported by taxes on the sale of gasoline and diesel at the pump, but as EVs increasingly replace the internal combustion engine, these future funds will be depleted, requiring taxation to be applied to all vehicles and thus quickly diminishing currently essential EV subsidies. Furthermore, our recent report, which shows global EV sales rising to around 70 million vehicles per year by 2040, describes the additional resource constraints on the metals required to make EV batteries (particularly nickel and cobalt) prohibitive to achieving faster growth, which will potentially push up costs.

Also, not all sectors of the global economy can and will decarbonise at the same pace. For example, the industrial sector often requires levels of extreme heat that simple electrification would find incredibly difficult to achieve. Other fuel alternatives — such as hydrogen — will have to play a key role if these sectors are to successfully decarbonise, but these alternatives currently face enormous challenges to be cost competitive with fossil fuels.

Finally, emerging economies, often still hampered by relative energy poverty, will remain dependent upon fossil fuels for longer. Many of these economies not only have less supportive infrastructure for greener solutions, like EVs, but they also depend to a greater degree on more energy-intensive manufacturing for their economic growth.

5. Realistically, where do you see the energy transition ending up? Do we believe that achieving a true net-zero global economy is really possible?

Yes, the energy transition is happening, but due to a combination of sector-specific restraints and a slower emerging market transition, the ultimate pace is unlikely to be as fast as many market commentators think.

6. This report is the culmination of months of effort by team members across many of ' service lines. What were some of the contributions from members of your team, and what was the process like of putting the report together?

The real value in reports like these lie in the numbers, and numbers are where our team of dedicated analysts spend most of their time. Months of work go into not just fine tuning the modelling processes but also clarifying the historical timeseries. We have excellent devoted team members that look at all of the sectors that make up the energy spectrum, ranging from the petrochemicals, power, road, refining and the supply side, and these analysts work night and day to produce the incredibly detailed country-by-country, sector-by-sector, fuel-by-fuel and year-by-year numbers that make up this excellent report.

7. What are some areas of interest you intend to explore in the coming year?

We are adding a lot of work on emissions and carbon prices this year, while building out the scenario capabilities within our models. Together, these additions will give our readers a more nuanced look at the future energy mix.

8. What brought you into long-term analysis?

I’ve always been most interested in the fundamental forces that influence commodity markets — having specialised in econometrics and advanced macroeconomic theory at university — dynamics that really come to the fore in medium- and long-term analysis. Our demand-side models are underpinned by a combination of our proprietary macroeconomic forecasts, technological developments, changing demographics and environmental pressures, while our supply-side analysis is underpinned by a combination of geological projections, pricing dynamics and technological changes.

9. What gets you up in the morning?

Coffee and the constantly changing news flow.

10. What are you looking forward to most this year (both personally and within your area of research)?

A vaccine, my freedom and the pending recovery in demand.

Medley Global Advisors acquisition

2022-12-28T18:18:24Z

acquires Medley Global Advisors from the Financial Times Group

1 December 2020: , the international energy research consultancy, today announces the purchase of Medley Global Advisors from the Financial Times Group. Medley Global Advisors is the leading macro policy research service, creating value and insight for the world’s top hedge funds, institutional investors, and asset managers. The business is at the forefront of helping a global clientele understand the nuances of central banking, fiscal and energy policymaking.

Fredrik Fosse, CEO of , says “We are excited for the Medley team and its clients to join . Medley and EA are a great fit as two leading research houses in adjacent but increasingly interlinked areas of coverage. Our deep expertise on energy markets will add to Medley’s macro and policy offering and our plans to invest in Medley will further strengthen coverage and service for its clients.”

Brendan Fitzsimmons, Medley’s senior managing partner and global head of macro strategy and client engagement, says “ is a natural home for Medley and this transaction brings together two teams with an equal passion for excellence in research and advisory services. EA’s plans for investing in macro coverage to build on its strong expertise in energy is an exciting prospect for the Medley team and its clients.”

About EA - is an independent research consultancy founded in 2012. The company provides expert-led analysis of energy market fundamentals and price movement forecasts, and is well known for its in-depth, forward-looking research based on both high-level industry contacts and its extensive data models. The company has offices in London, New York, Houston and Singapore.

About Medley Global Advisors - Medley Global Advisors is the leading macro policy advisory for the world's top hedge funds, institutional investors and asset managers. Its global network of analysts and strategists spans G10, global emerging markets, and macro energy coverages, helping its client base navigate a constantly shifting global landscape of monetary, fiscal, regulatory, energy, political and geopolitical affairs. The company has offices in New York, London, and Tokyo.

For more information, please visit www.energyaspects.com or write to us at contact@energyaspects.com .

energyaspectsolivestreet

How strong oil demand will keep prices above US$100 a barrel despite recession fears

Amrita Sen’s OPED in The Globe and Mail

Global Petrochemicals Margins Dashboard

Petrochemicals play an outsized role in the global refining industry. But how can you tie them better to your bottom line? ﻿

Recession Fears + Energy Investing

Energy webinar ﻿

The end of equivocation?

Russia miscalculated on its war’s speed; West may be doing so with transition? ﻿

' Trading the Transition service

Discussion with Haitham Al-Ghais, OPEC's Secretary General-elect

discusses oil markets and the energy transition with His Excellency Haitham Al-Ghais, OPEC's Secretary General-elect. ﻿

Global NGLs market: five-year outlook

Webinar ﻿

COP26: What’s expected

global NGLs supply data service

Overcoming data limitations in the global NGLs market

Fit for 55 – driving the energy transition

European Green Deal - Fit for 55 ﻿

Decarbonising the US Power sector

State level effort not enough to achieve national climate goals ﻿

US Power sector: Reduction estimates

The current state of affairs

Medium-term and Long-term energy market outlooks

Medium-term and Long-term energy market outlooks ﻿

OPEC+ spare capacity

Country-by-country historic and forecast data for each producer in the OPEC+ group ﻿

Long-term energy market outlook: The next 20 years

Interview with Matthew Parry, Head of Long-term at ﻿

Medley Global Advisors acquisition

acquires Medley Global Advisors from the Financial Times Group ﻿

Petrochemicals play an outsized role in the global refining industry. But how can you tie them better to your bottom line?

Energy webinar

Russia miscalculated on its war’s speed; West may be doing so with transition?

discusses oil markets and the energy transition with His Excellency Haitham Al-Ghais, OPEC's Secretary General-elect.

Webinar

European Green Deal - Fit for 55

State level effort not enough to achieve national climate goals

Medium-term and Long-term energy market outlooks

Country-by-country historic and forecast data for each producer in the OPEC+ group

Interview with Matthew Parry, Head of Long-term at

acquires Medley Global Advisors from the Financial Times Group