Oil

Why Can’t Tesla Drive US Oil Demand Lower? Plastics

It’s the battle that will define the US oil market this decade. On one side, the combination of rising sales of electric vehicles, more efficient conventional cars, and the impact of working-from-home is pushing down gasoline demand; on the other, the ever-growing popularity of plastics combined with a growing population is boosting consumption of petrochemicals.In short, one can call it “Tesla against the plastic industry.”If Tesla and its electric-vehicle rivals win the battle, oil demand will peak soon, helping to meet global climate change goals by reducing consumption of fossil fuels. For now, however, plastics have the upper hand, keeping overall oil demand growing.On Tuesday, the Energy Information Administration, the statistical arm of the US Department of Energy, released its first forecast for the 2024 oil market. The look is tentative but provides early clues about its direction. Every January, the EIA is the first of the three major public bodies to publish its outlook for the next year. The International Energy Agency will release its take in June, and OPEC will follow up a month later.The EIA analysis shows that US oil demand will rise next year to 20.63 million barrels per day, surpassing the most recent peak, set in 2018 and 2019, and within a whisker of the all-time high set between 2004 and 2007 when demand averaged 20.7-20.8 million barrels per day just before the onset of the global financial crisis.

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