October 16, 2017

THE NEWS IS BLUE: Oil headed to $10? China may be in the driver’s seat.

“As the world’s largest auto market, China’s EV (electric-vehicle) policy, which is still being formulated, could supercharge the race for EVs,” says Cunningham in a blog post for Oilprice.com.

He rattles off a number of signs of China’s electric-car gear-up, such as big planned investments and a growing clampdown on autos that cloud its skies with pollution.

“It will only take a small change in oil demand to upend price forecasts. After all, prices crashed in 2014, falling from $100 per barrel down to $50 in less than a year,” he says.

Cunningham points to a Financial Times report that says China plans to produce 7 million EVs per year by 2025 and to spend at least $60 billion on related subsidies between 2015 and 2020.

And a Bloomberg New Energy Finance report that predicts EVs will cut crude demand by 8 million barrels a day by 2040 should “send chills down the spines of oil executives,” he warns.

Down the spines of various petrocrats, too.

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