Big Oil's Bewildering Decline

[groovyd]

If it is bewildering at the start of the ev ramp imagine what it will be in the middle of it

Gas prices plummet amid 'bewildering' decline for oil as Thanksgiving travel approaches

 

[adaptabl]

If it is bewildering at the start of the ev ramp imagine what it will be in the middle of it

Gas prices plummet amid 'bewildering' decline for oil as Thanksgiving travel approaches

Except the EV sales have no effect on this at this point.

 

[lolder]

There was an article somewhere about how EVs would cause an oil glut and I think it mentioned 2023. It may be coming sooner.

 

[Msjulie]

There was an article somewhere about how EVs would cause an oil glut and I think it mentioned 2023. It may be coming sooner.

While I understand that entrenched industries will suffer during the transition, I'm always amazed at the blind eye turned toward science and business as usual behavior from so many older industries.. Without being too political or perhaps (justifiably so) alarmist, somethings gotta change ..

Didn't intend to go political here, we live in interesting and scary and fascinating times..

 

[Nocturnal]

Except the EV sales have no effect on this at this point.

Why do you say that? The mix of renewables is definitely tamping down oil demand globally.

 

[ngogas]

I too think ev and renewal energy does have affect in oil producers.

 

[Knightshade]

Why do you say that? The mix of renewables is definitely tamping down oil demand globally.

EVs have only recently broken 1% of annual car sales... they MIGHT make it to 2% by end of this year.

Many things are pushing oil demand down- but EVs aren't really a substantial one of them yet. They will be in the future though- especially if other makers finally start managing volume production.

But there's simply not enough battery production in the world now (or next month or next year) to make ICEs go away anytime soon.

 

[Nocturnal]

EVs have only recently broken 1% of annual car sales... they MIGHT make it to 2% by end of this year.

Many things are pushing oil demand down- but EVs aren't really a substantial one of them yet. They will be in the future though- especially if other makers finally start managing volume production.

But there's simply not enough battery production in the world now (or next month or next year) to make ICEs go away anytime soon.

Yeah, EVs are just a small part but still a part. That's why I included renewables in general.

 

[Brando]

Yeah, EVs are just a small part but still a part. That's why I included renewables in general.

US pickup trucks near 2 million in sales/year. Many of those truck are real gas guzzlers.

 

[groovyd]

EVs have only recently broken 1% of annual car sales... they MIGHT make it to 2% by end of this year.

Many things are pushing oil demand down- but EVs aren't really a substantial one of them yet. They will be in the future though- especially if other makers finally start managing volume production.

But there's simply not enough battery production in the world now (or next month or next year) to make ICEs go away anytime soon.

1% is significant, 2% would be huge... guarantee oil producers are noticing this already. can't wait till it hits 10%+ next year if recent ev sales charts are anything to go by.

 

[Dana1]

I too think ev and renewal energy does have affect in oil producers.

Nope. The 1 million barrels that Iran can export (sanction waivers) is a highly contributing cause. Folks had ramped up to fill the void but no void now.

 

[ℬête Noire]

1% is significant, 2% would be huge... guarantee oil producers are noticing this already. can't wait till it hits 10%+ next year if recent ev sales charts are anything to go by.

The US is already at >2% plug-ins for new vehicle sales, September/October was something like %2.3 or so. Most of those were BEVs with a chrome T on the hood.

However that's still relatively small impact on total average consumption of the fleet because it's still a much lower percentage of the vehicles on the road. The biggest impact so far has been happening longer term w/increasing average MPG, in no small part driven by regulations on MPG floors for new vehicles, that are now really biting in as a lot of 10+ year old vehicles are reaching end-of-life.

So we aren't really seeing a BEV hit on the prices right now (it however is very likely weighting on stock prices, because those look out much further as they are supposed to be based on expected future returns).

Probably an even harder hit will be the Tesla Semi because it'll throw diesel prices for a loop downward since it's a smaller market and long haul trucking is such a big part of the market for a relatively small number of vehicles that have roughly 3-year turnover (until they go into much lower yearly mileage semi-retirement....pun unvoidable). This in turn is likely to somewhat tighten gasoline supplies because it takes a lot of work on process tuning of refineries, and some extra energy, to push around the gasoline vs diesel per barrel of crude from it's "natural" mix.

 

[Knightshade]

1% is significant, 2% would be huge... guarantee oil producers are noticing this already.

Not really.

First- that's 1% of 1 years sales (about 800k out of 80 million sold)- not total vehicles in service.

There's something like 1.3 billion personal and commercial vehicles in service in the world. There's about 3 million total EVs.

So EVs are 0.23% of vehicles in the world.

It's even less significant than that though.

Only about 50% of oil is used for gasoline anyway, and some of the rest is used to produce the electricity EVs run on.

So you're talking, optimistically, of roughly a 0.1% actual change in oil demand from all EVs ever sold right now.

That's a rounding error to big oil right now.

Noticing? Sure. Missing any meals over it? Nope, and not for some years yet.

Especially when fuel economy standards that were getting higher in say the US no longer have to anymore.

1
can't wait till it hits 10%+ next year if recent ev sales charts are anything to go by.

Uh- it's physically impossible for it to hit 10% next year. Or the year after that.

10% would be about 8 million cars a year.

Tesla produces more batteries (by kwh) than every other car company in the world combined- and they're hundreds of thousands of cars of capacity short to make 1 million a year.

Battery production capacity (worldwide) is expected to about double by 2020.

At which point they still won't be making enough to produce enough cars to hit 10% of the market.

This is why tesla has a big competitive advantage right now (well, one reason anyway) and why some big legacy makers are dumping billions into battery production facilities right now.

Are more companies get better at making EVs at a profit, and more customers accept EVs as ICE alternatives, battery production is going to remain the limiting factor for years to come yet.

EVs won't even be 50% of the market in 20 years by most analysis projections because there simply won't be enough batteries produced in the world for that to be possible.

 

[David99]

The number of EVs on the road today offset only a very small amount of oil. Too small to make a significant difference. But the success of EVs have caused the beginning of a disruption for the oil industry. They know well they are about to go down. They know EVs will take over and lower oil demand. Smart people think ahead. The oil industry knows the demand is going only down from now on. What do you do when your window of opportunity to sell your goods is limited? You try to sell as much as possible in that time frame and kill your competition. Countries like Saudi Arabia, Iran and some others have the oil shooting out of the ground. They have the lowest cost. Those countries increase production, lower the oil price, sell more of theirs while suffocating their competition. They try to undercut the others by offering their oil for less so that those with higher production cost are forced out of business or at least sell less.

 

[Matt L]

1% is significant, 2% would be huge... guarantee oil producers are noticing this already. can't wait till it hits 10%+ next year if recent ev sales charts are anything to go by.

Unless there are a lot more charging stations added, quickly...I can wait for 10%

 

[groovyd]

The US is already at >2% plug-ins for new vehicle sales, September/October was something like %2.3 or so. Most of those were BEVs with a chrome T on the hood.

However that's still relatively small impact on total average consumption of the fleet because it's still a much lower percentage of the vehicles on the road. The biggest impact so far has been happening longer term w/increasing average MPG, in no small part driven by regulations on MPG floors for new vehicles, that are now really biting in as a lot of 10+ year old vehicles are reaching end-of-life.

So we aren't really seeing a BEV hit on the prices right now (it however is very likely weighting on stock prices, because those look out much further as they are supposed to be based on expected future returns).

Probably an even harder hit will be the Tesla Semi because it'll throw diesel prices for a loop downward since it's a smaller market and long haul trucking is such a big part of the market for a relatively small number of vehicles that have roughly 3-year turnover (until they go into much lower yearly mileage semi-retirement....pun unvoidable). This in turn is likely to somewhat tighten gasoline supplies because it takes a lot of work on process tuning of refineries, and some extra energy, to push around the gasoline vs diesel per barrel of crude from it's "natural" mix.

also in the commercial trucking industry those sort of purchase decisions are very digital... if it saves them money they will buy it. it isn't so much of an emotional decision like to the average consumer. so if they do indeed introduce a truck that will save them more then a dollar over the life of the truck it will be quickly adopted by all the trucking companies as soon as their old trucks die.

 

[groovyd]

Uh- it's physically impossible for it to hit 10% next year. Or the year after that.
EVs won't even be 50% of the market in 20 years by most analysis projections because there simply won't be enough batteries produced in the world for that to be possible.

Guarantee ev's will cover more then 50% of the market in 20 years... we can meet back here at that time to cover our bets or much sooner when it actually happens.

 

[Knightshade]

Guarantee ev's will cover more then 50% of the market in 20 years... we can meet back here at that time to cover our bets or much sooner when it actually happens.

Where do you imagine the battery production capacity for that to happen "much sooner" than even the most optimistic industry experts think is possible will come from?

 

[Ludalicious]

Anyone that doesnt think EV is having an impact on oil is delusional. I went from spending over 1200 a month on gas to Zero with just one vehicle. That's just one story. Let's not forget that some of these vehicles are replacing Very high HP vehicles and expensive exotic 4drs. No one is going to go from a toyota Yaris to a Model X or S. JM2C

 

[David99]

Anyone that doesnt think EV is having an impact on oil is delusional. I went from spending over 1200 a month on gas to Zero with just one vehicle. That's just one story. Let's not forget that some of these vehicles are replacing Very high HP vehicles and expensive exotic 4drs. No one is going to go from a toyota Yaris to a Model X or S. JM2C

Globally there are 1.2 billion cars on the road and aprox 4 million EVs. That's 0.3%. Cars are not the only ones using oil. Airplanes, semis, trains, ships and many other industries use a lot of oil as well. So the total oil demand has dropped maybe 0.1% over the last 8 years since EVs have started to be sold in numbers. That's far far less than the fluctuation happening all the time. The oil industry isn't being hit right now, but they sure know EVs are going to take over sooner than later. That's what scares them and the effects are showing already.