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Will we see peak oil demand soon?

Not exactly, according to Morningstar. Without adequate investment in the sector, supply and dynamics could turn severely lopsided.

In a February report, researchers said recent predictions of “oil demand's death” have been greatly exaggerated. They forecast oil demand to decrease to 88 million barrels a day by 2050, down from the 99 million barrels a day seen in 2019 — about an 11% decline.

“That's less of a decline than some may expect,” the Morningstar team wrote. “We're optimistic on EV adoption, which will slash road fuel demand, but not every component of oil demand can be electrified.”

Morningstar's forecast is below the consensus estimates, but above the bear case, as illustrated in the chart below.

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