Business Outlook 2018
BUSINESS OUTLOOK 2018
Looking at the longer-term outlook, there are wide-ranging views on how the energy market will evolve and what this means for oil demand. Figure 4 shows a range of future oil demand scenarios, showing growth continuing well into the 2030s. Even in the fastest transition scenario, whereby the two-degree global climate change target is met, oil demand continues to grow until the late 2020s, highlighting the key role oil must play in the energy mix, even in a lower-carbon economy.
Figure 4: Oil Demand Scenarios
Evolving Transition Scenario
Fastest Transition Scenario (where climate change targets are met)
Oil Demand (Million barrels per day)
Supply With No Further Investment
Source: BP Energy Outlook 2018
The longer-term viability of alternatives to fossil fuels will gradually have a bigger impact on oil markets and depend primarily on political decision making, infrastructure requirements, the provision of subsidies, the cost of supply and the impact of energy efficiency gains on demand.
3.2 Gas Markets
The average day-ahead gas price for 2017 was 45 p/th, a 30 per cent increase on the 34.6 p/th average gas price of 2016.
2017 started off with high gas prices, with exports to France reaching capacity to meet extra demand due to the country’s reduced nuclear capacity. The first quarter also saw the outage extended at Rough, the UK’s largest gas storage facility. This eventually led to Centrica Storage announcing the permanent closure of the facility later in the year.
Made with FlippingBook Annual report