The Outlook for Oil Demand Growth
Even with the growth of the “sustainable energy” industry, due in large part to technological advances and government subsidy policies, worldwide oil demand has continued to grow as fossil fuels have provided the energy that individuals, families, and businesses need in growing economies. That growth may be coming to an end much sooner than previously projected, as discussed in an updated BP industry projection.
As this article notes, “even its most bullish scenario sees no more than ‘broadly flat’ [oil demand] for the next two decades as the energy transition shifts the world away from fossil fuels.” This transition, however, does not necessarily mean that traditional “oil companies” are a poor investment.
Essential to successfully analyzing and valuing participants in the energy industry is making a well-informed assessment of how these large companies are strategically employing their cash flows to adjust to the changing market.
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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management
