LONDON: Global oil consumption will reach 100 million barrels per day (bpd) — more than double the level of 50 years ago — in months, according to an industry report by Reuters.
Despite overwhelming evidence of carbon-fueled climate change and billions in subsidies for alternative technologies such as wind and solar power, oil is so entrenched in the modern world that demand is still rising by up to 1.5 percent a year, said the report.
There is no consensus on when world oil demand will peak but much depends on how governments respond to global warming, according the International Energy Agency (IEA), which advises Western economies on energy policy.
OPEC Secretary-General Mohammed Barkindo told a conference in South Africa on Sept. 5 that global consumption would hit 100 million bpd this year, sooner than anyone had expected.
With a sophisticated global infrastructure for extraction, refining and distribution, oil produces such a powerful burst of energy that it is invaluable for some forms of transport such as aircraft.
Of the almost 100 million barrels of oil consumed daily, more than 60 million bpd is used for transport. Alternative fuel systems such as battery-powered electric cars still have little market share.
Much of the remaining oil is used to make plastics by a petrochemicals industry that has few alternative feedstocks.
Although government pressure to limit the use of hydrocarbons such as oil, gas and coal is increasing, few analysts believe oil demand will decrease in the next decade.
If the current mix of policies continues, the IEA expects world oil demand to rise for at least the next 20 years, heading for 125 million bpd around the middle of the century.
‘No sign of waning appetite for oil’
‘No sign of waning appetite for oil’
- Oil is so entrenched in the modern world that demand is still rising by up to 1.5 percent a year
- Of the almost 100 million barrels of oil consumed daily, more than 60 million bpd is used for transport
Saudi stocks rise above 11,000 as energy shares lead gains
RIYADH: Saudi Exchange’s benchmark Tadawul All Share Index climbed above 11,000 on Sunday, led by energy and materials stocks despite geopolitical uncertainty from ongoing tensions between US-Israel and Iran across the region.
As of 12:30 p.m. Saudi time, the benchmark index had advanced 224.80 points, or 2.09 percent, to 11,001.12. The MSCI Tadawul Index rose 26.96 points, or 1.84 percent, to 1,488.86, while the Kingdom’s parallel market, Nomu, slipped 0.05 percent to 22,485.78.
The gains came as Gulf markets reacted to heightened tensions between the US-Israel alliance and Iran, prompting investors to shift toward sectors more resilient to higher oil prices and supply disruptions.
Saudi Aramco was among the strongest performers, with its share price rising 4.56 percent to SR27.06 as of 12:30 p.m. Saudi time.
Speaking to Arab News, Tony Hallside, CEO of STP Partners, said: “Energy producers and oilfield services typically outperform on higher crude, while the pain concentrates in airlines, shipping, petrochemicals, and any sector with high fuel or logistics intensity.”
Century Financial chief investment officer Vijay Valecha told Arab News that energy companies such as Saudi Aramco could see their share prices rise under current market conditions.
“At the sector level, energy and petrochemical companies are likely to remain relatively resilient due to stronger pricing. In contrast, sectors such as real estate, consumer discretionary, banking, and capital markets would likely see short-term volatility and profit-taking as investors adopt a more cautious stance,” said Valecha.
He added that elevated energy prices could also increase global inflationary pressures and create uncertainty in supply chains, potentially weighing on broader economic activity.
Stock exchanges across the Gulf Cooperation Council also showed signs of recovery on March 6, with the Bahrain Bourse edging up 0.24 percent and the Muscat Stock Exchange gaining 1.44 percent.
The Qatar Stock Exchange, however, declined 0.15 percent.
UAE equities were closed on Sunday due to an official holiday.
On March 6, the Dubai Financial Market index fell for a fifth straight session, down 3.2 percent, or 197.49 points, to 5,917.22. It declined 9.01 percent for the week.
The Abu Dhabi Securities Exchange general index fell for a seventh consecutive session, dropping 1.4 percent, or 141.49 points, to 9,903.36 on March 6.
“UAE equities ended the week lower as the widening conflict involving the US, Israel, and Iran continued to weigh heavily on risk sentiment. Dubai and Abu Dhabi stocks slid further upon reopening on Wednesday, pressured by regional tensions after the two-day break,” Valecha said in a separate statement.
He added: “Banking and property stocks have been the largest drags as investors reassessed and questioned whether the market had priced in too much resilience. The shift in perception followed missile and drone attacks on Dubai over the weekend, which undermined the idea that the city remained insulated from global tensions.”
