Goldman Sachs: AI to Impact Crude Oil Prices Over the Next Decade

Goldman Sachs anticipates a significant effect on the supply side.

SEATTLE (Oil Monster): In a paper published recently, Golman Sachs looked at how artificial intelligence (AI) would affect crude oil prices over the course of the next ten years. AI is predicted to have a favorable impact on supply.

AI technologies are being observed to have an impact on a number of industries, including the oil business. AI is becoming more and more discussed at conferences for the oil business, according to Goldman Sachs. It predicts a modest demand impact from AI. Over the next five to ten years, a rise in demand of up to 700,000 barrels per day is anticipated. This is in contrast to the daily demand of about 100,000 barrels worldwide.

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Goldman Sachs anticipates a significant effect on the supply side. It expects that AI will boost automation and lower drilling and logistics costs. AI has the potential to cut a new shale's cost by over 30%. Over the course of the ten years, it might also lead to a 7% reduction in operating expenses.

Furthermore, the AI-related methods should provide better predictive maintenance, which could reduce production downtime. As a result, according to Goldman Sachs, oil production efficiency might rise by 8% to 20%.

Over a ten-year timeframe, the total impact of AI is estimated to be about $5 per barrel. The analysis also stated that, overall, AI will have a slight negative net effect on oil prices over the medium and long terms.