Oil sags on Thursday, as investors take profits. Yesterday, oil traded at the highest levels unseen since March. Today, Brent futures for June delivery have dropped by 0.44% to $66.26 per barrel. WTI contracts for delivery in May have fallen by 0.52% to $62.83 per barrel.

Yesterday's sharp increase of both benchmarks came due to the upwardly revised IEA oil demand forecast and the publication of inventory data in the US. The International Energy Agency revised its forecast upward by 230K barrels per day, citing a rapid economic recovery this year. IEA experts believe that demand for oil will rise by 5.7 million and reach 96.7 million barrels per day.

At the same time, the US Energy Department said that oil inventories fell by 5.89 million last week, beating S&P Global Platts forecast of a 2.9 million decrease.

Notably, US oil inventories are currently 10% lower than a year ago. Inventories usually drop during the summer period.

When a ban on travel between cities and countries, as well as quarantine restrictions, will be lifted, energy prices should soar. Today's nosedive of the quotes should be considered a mild correction. Commerzbank analyst Eugen Weinberg reckons that oil market conditions are still favourable and the situation will improve even despite restrictions in Europe and India.

WoodMac forecast: oil to cost $40 by the end of the decade

Wood Mackenzie experts believe that global oil prices will plunge to $40 per barrel by 2030.

They suggest that a drop in oil prices will become irreversible if governments hold the increase in the global average temperature to well below 2°C under the Paris Agreement.

The main goal is to curb global warming by means of controlling greenhouse gas emissions. In this case, countries will begin to reduce fuel consumption and provide transport and industries with electricity. WoodMac assures the global energy matrix will change significantly. As a result, consumption of oil will reduce sharply already by 2023.

According to the report describing transition to new sources of energy, oil demand is expected to plummet to 2 million barrels per day and may eventually reach 35 million by 2050. In this case, carbon emission may reduce by up to 60%.

In 2019, oil consumption reached its highest level of 100 million barrels per day. It is expected that deferred demand will increase even more in 2021. Oil prices are unlikely to decline sharply until the end of the decade. If the transition to electrification takes place at an accelerated pace, Brent crude may trade at $40 per barrel by 2030 and plunge to $10-18 per barrel by 2050.