BP points out in the annual outlook that delays in the energy transition could become “costly and disorderly”

The crude oil futures market gave up its early rise, and after rising for 4 consecutive weeks, it began to decline at the beginning of the week.

The US inflation rate announced this week was soft, and in addition to the fact that expectations for the September interest rate cut by the US Federal Reserve (Fed) were raised, and in addition to the fact that the energy demand increase forecast was viewed as material, crude oil and gasoline inventories declined more than expected in US inventory statistics, and demand for jet fuel reached a high level since 2020/1 on a 4-week average supported the market price.

However, the producer price index released on Friday was slightly above expectations, and concerns remain about China's demand, where oil demand contracted in April and May according to International Energy Agency (IEA) data.

According to Dow Jones, ING analysts said, “Increased expectations of interest rate cuts by the Fed and the constructive crude oil balance suggest that prices will continue to be sufficiently supported.” “We will continue to maintain the view that the ICE Brent average for the current fiscal year will be 88 dollars per barrel.

According to Baker Hughes, the number of oil drilling rigs is at its lowest level in the past two and a half years, but the United States has maintained record crude oil production due to good drilling efficiency.

The production volume announced by the EIA last week is 13.3 million barrels per day, and the average production for the full year is expected to be 13.2 million barrels per day.

The August Nymex previous month (CL1: COM) includes a 0.5% drop on Friday, 82.21 dollars/barrel with a -1.1% drop this week, and September Brent crude oil (CO1: COM) received a 0.4% drop on Friday, and closed at 85.03 dollars/barrel with a -1.7% drop this week.

US natural gas futures rose for the first time in 4 days in response to observations that the Freeport LNG export plant, which had been suspended due to the effects of the hurricane “Beryl,” will soon resume operations.

BP (British Petroleum Company) raised demand forecasts for oil and gas, assuming that renewable energy sources such as wind power and solar power have not increased rapidly enough to catch up with the growth in global energy demand.

In its 2024 energy outlook, BP warned that the world is likely to switch too slowly from fossil fuels to avoid serious climate change, increasing the risk that the eventual transition to clean energy “will be costly and disorderly.”

If the current trend that is too late continues until the early 2040s, the world may run out of the so-called “carbon budget,” which suppresses the rise in temperature to 2℃ at pre-industrial levels.

The energy sector, represented by the Energy Select Sector SPDR ETF (XLE), ended the week at +0.4%.

Top 10 energy and natural resources growth rates over the past 5 days:

Pineapple Energy (PEGY) +77%, Solaris Oilfield Infrastructure (SOI) +44.7%, Flux Power Holdings (FLUX) +42.6%, Hawaiian Electric (HE) +29.1%, TPI Composite (TPIC) +27.6%, Solid Power (SLDP) +27.2%, Nescale Power (SMR) +25.5%, VivoPower (VVPR) + 25%, Gatos Silver (GATO) +23.1%, Ameresco (AMRC) +22%

Top 5 declines in energy and natural resources over the past 5 days:

ZIM Integrated Shipping (ZIM) -22.9%, Nano Nuclear Energy (NNE) -11.9%, Dorian LPG (LPG) -8.7%, Ardmore Shipping (ASC) -8.7%, Stealthgas (GASS) -8.4%.