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BP Says Oil Consumption May Never Return to Pre-Coronavirus Mark

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BP plc (BP - Free Report) said that the era of relentless growth in crude demand is over in its latest energy outlook. This makes the British energy giant the first to announce that oil demand has reached its peak, while other players still expect oil demand growth to last for another 10 years or more.

The company expects consumption of crude oil to never return to the level seen before the pandemic. With the gradual shifting from fossil fuel to renewables across the world, the integrated energy firm expects oil demand to at the most remain flat over the next 20 years. BP added that the pace of decline in oil demand in the next three decades will depend on how quickly electric cars take over the transportation sector.

This justifies BP’s plan to lower oil and gas output by 40% over the next 10 years while investing as much as $5 billion a year in renewables. Importantly, British energy giant BP targets to become a net zero emissions company by 2050.

Royal Dutch Shell plc (RDS.A - Free Report) is another key energy firm planning to become a net zero emission energy firm by 2050. Importantly, the company intends to slash the carbon intensity of its products by roughly 30% by 2035. By 2050, the company plans to lower the carbon footprint by 65%.

BP currently carries a a Zacks Rank #4 (Sell). Meanwhile, a few better-ranked players in the energy space are Pioneer Natural Resources Company (PXD - Free Report) and Concho Resources Inc. (CXO - Free Report) , each holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Pioneer Natural has seen upward earnings estimate revisions for 2020 in the past 30 days.

Concho is likely to see earnings growth of 21.6% in 2020.

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