E&P, Renewables, Energy Transition

Rystad Energy’s assessment of the COP26 summit consensus is that the last-minute compromises can be seen as overwhelmingly positive towards averting critical levels of global warming. Our data-driven forecasts model different climate scenarios and, up until the Glasgow Climate Pact, our research pointed to a likely outcome of 1.8°C. However, while we will not change our base case until further evidence justifies such a move, the commitments by global leaders to cut methane emissions and reduce deforestation, alongside faster than expected solar PV manufacturing capacity additions and EV penetration, could be a recipe for limiting the temperature rise to 1.6°C versus pre-industrial levels. (read more)

Oil Markets

Global oil production is slowly recovering towards pre-Covid-19 levels, but in West Africa the pandemic is set to leave lasting effects. This important region for sweet crude oil production faces numerous challenges as it strives to heal from the pandemic, including underinvestment, a lack of infill drilling at mature fields, and infrastructure that is either ageing or threatened, a Rystad Energy analysis showed. (read more)

Oil Markets, Gas Markets

The recent rally in LNG prices in Europe and Asia has dramatically widened the economic incentive to switch from natural gas to oil in power generation. Steep carbon regulations and operational constraints limit Europe’s ability to burn oil in power plants, but Asia has more flexibility. If the gap between LNG and oil prices remains wide, Asia is set to boost oil demand by 400,000 barrels per day on average over the next two quarters, a Rystad Energy report shows. This will support already high oil prices. (read more)