Published: Tue, November 14, 2017
Finance | By Loren Pratt

Don't write oil's 'obituary', IEA says in long-term demand forecast

Don't write oil's 'obituary', IEA says in long-term demand forecast

The report says that global energy demand is expected to grow 30 percent by 2040 and that demand for oil is not expected to peak until 2040.

In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion.

"A remarkable ability to unlock new resources cost-effectively pushes combined United States oil and gas output to a level 50% higher than any other country has ever managed; already a net exporter of gas, the U.S. becomes a net exporter of oil in the late 2020s", the IEA said in its 2017 world energy report.

"Oil is already facing stiff competition from ever-cheaper and more environmentally friendly energy sources as traditional fossil fuel users switch to cleaner, low-carbon alternatives", IEA said in its World Energy Outlook 2018. For 2018 the IEA is forecasting growth of 1.3 million barrels a day (1.4%) to a total of 98.9 million barrels a day.

"EVs are coming fast, but it is still too early to write the obituary for oil", the IEA states, with global oil demand steady at 104 million bpd by 2040, compared to 94 million bpd in 2016, according to its most-likely scenario.

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an worldwide oil conference.


Brent crude oil prices recently climbed to two-year highs of more than $60 a barrel due to supply disruptions, geopolitical concerns and a growing expectation that an Opec-led agreement to reduce production will be extended through 2018. It kept its estimate for this year at 3.08 million bpd.

If planned pipeline projects come to fruition, the United States and Canada combined could export more than 700,000 bpd to China by 2040 - a drop in the barrel in the country's 15.5 million bpd demand.

Growth in energy demand is half what it would have been without improvements to efficiency.

The U.S. shale surge could also mean an era of lower-for-longer oil prices.

However, even rapid growth in the electric vehicle fleet would be unlikely to have a substantial impact on oil consumption for passenger transport until the mid-2020s, it said. Indeed, the IEA also suggests that demand for oil will remain supported by lower prices, going forward.

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