EVs a long-term wildcard in the oil market

• Electric vehicles are forecast to cut into oil demand by 1M-2M bbl/day by 2035, according to oil industry consultant Wood McKenzie.
• That estimate is actually much more conservative than Bloomberg New Energy Finance’s estimate for EVs to impact demand by 8M bbl/day by 2035. For perspective, OPEC agreed this week to coordinated production cuts of 1.2M bbl/day which swung crude oil prices wildly. EVs are only sipping up the equivalent of 50K bbl/day currently.
• The general consensus even in the oil industry is that governments are moving toward major changes with pollution and emissions regulations. Just this week, the cities of Paris, Mexico City, Madrid and Athens all said they would ban the use of diesel vehicles by 2025. Beijing is also slowly adopting pro-EV policies.
• A higher mix of EVs in the future has already been tipped off by the dramatic long-term electrification initiatives announced this year by companies such as BMW (OTCPK:BMWYY), Volkswagen (VLKAY), Ford (NYSE:F) and Toyota (NYSE:TM). Around the corner, Tesla Motors (NASDAQ:TSLA) and General Motors (NYSE:GM) have their mass model EVs ready to roll - while new EV trucks, buses and motorcycles are also on the way.
• WTI crude oil futures +1.21% to $51.68/bbl on Friday. Brent crude +0.96% to $54.46/bbl.
• ETFs: USO, OIL, UWTI, UCO, OTC:DWTI, SCO, BNO, DBO, DTO, UGA, USL, DNO, OLO, SZO, OLEM, OILK, OILX.