Source: https://www.reuters.com/

Artificial intelligence could hurt oil prices over the next decade by boosting supply by potentially reducing costs via improved logistics and increasing the amount of profitably recoverable resources, Goldman Sachs said on Tuesday.

“AI could potentially reduce costs via improved logistics and resource allocation … resulting in a $5/bbl fall in the marginal incentive price, assuming a 25% productivity gain observed for early AI adopters,” Goldman Sachs said in a note.

Goldman expects a modest potential AI boost to oil demand compared to demand impact to power and natural gas over the next 10 years.

According to Goldman Sachs’ estimates, about 30% of the costs of a new shale well could potentially be reduced by AI. Additionally, an AI-induced 10% to 20% increase in the low recovery factors of U.S. shale could boost oil reserves by 8% to 20% (10-30 billion barrels).