The International Energy Agency (IEA) is so bearish on energy and optimistic on clean technology growth. This creates an oversupply of oil and gas, which could result in oil prices crashing to $25 per barrel by 2050.
The IEA, an advocator of green technologies, believes that clean energy will meet nearly all energy demand growth between 2023 – 2035. Energy demand will peak before 2030.
Brent crude oil prices are hovering near the lows for the year. YTD, prices are down by 1.45%. Investors in Exxon Mobil (XOM) are not concerned. XOM stock is 25.99% above its 52-week low. Devon Energy (DVN), Occidental Petroleum (OXY), and ConocoPhillips (COP) are near their lows for the year. Investors may bet that oil prices rebound by holding in those stocks, instead.
Watch the EV Plunge
The severe drop in electric vehicle demand would contradict the IEA’s views. ICE car makers are scaling back on their EV projects. Lucid Motors (LCID) is bleeding cash. The firm announced a stock sale after markets closed yesterday. Rivian (RIVN) is struggling, reporting higher losses as it produces more vehicles. Only Tesla is the strongest player in the EV market. Its prototype presentation of the cybercab and robot shows that it will expand outside of the falling EV markets.
Your Takeaway
Oil prices are not likely to fall to $25/bbl. Demand for oil rises, while clean energy demand falls when oil prices fall.
