Norway’s Oil Demand Hasn’t Crashed Despite Record EV Market Share
The fact that a record 90% share of all new car sales in Norway are electric has failed to make any impact on the country’s oil demand, indicating that hopes of rising EV uptake making an immediate dent in global oil demand are unrealistic. Last year, 82.4% of all new passenger cars sold in Norway were fully electric, up from 79.3% in 2022, according to the Norwegian Public Roads Administration and the Norwegian Road Federation (OFV). This share has jumped to over 90% this year, but the impact on Norway’s oil demand “has been negligible,” bank UBS said in a note this week carried by Investing.com. Norway has risen to become an EV powerhouse, also thanks to “generous financial incentives,” which have been partly funded by the Government Pension Fund Global, the world’s largest sovereign wealth fund that has amassed its wealth from sales of oil and gas, UBS noted. Norwegians, like other consumers, are concerned about vehicle range, and many opt for hybrids or gasoline-fueled vehicles to travel longer distances, according to the bank. “Another possibility is that electric vehicles are used for short distances, but Norwegians still rely on fossil fuels to cover longer distances,” UBS said in the note. Moreover, even if road transportation fuel demand has declined, demand for LPG and ethane, used for heating and cooking and in petrochemicals, has been very strong, the bank added. Road fuel demand in Norway has remained relatively stable even with soaring EV adoption, raising questions about whether EVs really have a material impact on diesel and gasoline sales, Rystad Energy said last year. The lack of a noticeable dent in oil demand in a country where EVs are 90% of all new car sales is a cautionary tale for those predicting an immediate drop in oil demand due to rising EV sales, according to UBS. The bank still sees years of rising global oil demand. “We continue to believe it will increase over the coming years, then plateau and begin a gradual decline at some stage during the next decade.”
India Will Show World A New Path On Biofuels Through The Global Biofuels Alliance (GBA): Petroleum And Natural Gas Minister Hardeep Singh Puri
Petroleum and Natural Gas Minister Hardeep Singh Puri has said that India will show the world a new path on biofuels through the Global Biofuels Alliance (GBA). The alliance was launched by Prime Minister Narendra Modi on the sidelines of the G20 Summit. GBA is an India-led initiative to develop an alliance of governments, international organizations and industry to facilitate adoption of biofuels. Mr Puri said, 19 countries and 12 international organisations have already agreed to join the alliance. The Minister observed that Global Biofuels Alliance has given a historic momentum for world’s quest for cleaner and greener energy. It will transform country’s farmers from ‘Annadatas to Urjadatas’ as an additional source of income. Mr Puri added that India will save about 450 billion rupees in oil imports and 63 Metric Tonnes of oil annually.
Oil Prices Are Set for a Weekly Gain as Yellen Sees Inflation Falling
Crude oil prices may end this week in the green as the U.S. Treasury suggested the weak first-quarter GDP data may be revisable and as supply concerns persisted. If the benchmarks do indeed end the week with gains, it would be the first positive week in three. “The U.S. economy continues to perform very, very well,” Janet Yellen told Reuters yesterday commenting on the latest economic reports out. Those showed a GDP growth rate of just 1.6% for the first quarter and an accelerated inflation rate of 3.7% in personal consumption expenditures. Expectations had been rather different, with GDP seen at 2.4% by analysts polled by Reuters. The quarterly change in the rate of personal consumption expenditures inflation was also surprising. “The fundamentals here are in line with inflation continuing back down to normal levels,” the Treasury Secretary said, which served to quickly quench any concern oil traders may have had about the state of the economy of the world’s biggest oil consumer. Meanwhile, Israel said it was going to bomb Rafah again, which seems to have reignited concern about the security of oil supply in the Middle East as Tel Aviv’s Western allies urged the country not to step up the attacks for fear of escalation with Iran. A third factor that has helped oil prices this week was the state of U.S. inventories, which booked a decline for last week. The Energy Information Administration said on Wednesday that crude oil inventories had shed as much as 6.4 million barrels in the week to April 19—an amount apparently seen as sizeable enough to motivate a more bullish sentiment on the oil market. As a result of all this, Brent crude is back above $89 climbing towards $90 per barrel and West Texas Intermediate is closing in on $84 per barrel again.
GAIL plans to expand LNG trading business to global markets
India’s top gas marketer GAIL aims to become a global liquefied natural gas (LNG) trader as the expanding market fuels new business opportunities. “We plan to ramp up our LNG trading business. We began with sourcing LNG cargoes for ourselves and have expanded to sourcing cargoes for some other Indian companies. Now we plan to serve non-Indian customers as well, with an aim to become a global LNG trader,” GAIL chairman and managing director Sandeep Kumar Gupta told ET. “The global trade can significantly boost our topline and provide visibility to our Singapore subsidiary,” said Gupta who has set the ambition to turn GAIL into a “company of global standing”. The Singapore subsidiary is engaged in sourcing spot LNG. GAIL plans to double its LNG trading volume by 2030, Gupta said, without specifying the current size of its business. “We have expertise in gas. We have been procuring from so many geographies. We have sold several US cargoes to multiple customers,” said Gupta. GAIL has a long-term contract to purchase LNG from the US and sells part of those supplies to international customers, instead of bringing it to India based on arbitrage opportunities. But with a focus on trading now, GAIL would actively seek out buyers and sellers of spot LNG in the global marketplace. GAIL has long-term contracts for the annual purchase of 14 million tonnes of LNG from various suppliers across the globe, about three-fourths of India’s total long-term buys of about 19 million tonnes. The country’s LNG import from the spot market is small-just about 10%-but growing. GAIL plans to confine itself to the spot market for its global LNG trade for now, Gupta said. Many established global traders also offer long- and medium-term contracts to buyers and suppliers. The spot market for LNG has hugely expanded over the last decade with booming supplies, especially from the US and Australia, and diverse customers, mainly from emerging markets. The creation of trading infrastructure has also aided the growth of the spot market, which offers flexibility to buyers and suppliers.