OPEC, in major shift, says oil demand to plateau in late 2030s
By Alex Lawler
LONDON (Reuters) - Global oil demand will plateau in the late 2030s and could gradually decline by then, OPEC said on Thursday. This is a significant shift for the producer group, reflecting the ongoing impact of the coronavirus crisis on business and consumer habits.
The forecast made by the Organization of Petroleum Exporting Countries in its World Oil Outlook 2020 is based on a growing number of other forecasts that the pandemic could mark the turning point for peak oil demand.
Oil consumption will increase from 90.7 million barrels per day in 2020 to 107.2 million barrels per day (bpd) in 2030, OPEC said, 1.1 million bpd below its forecast for 2030 last year and over 10 Millions bpd below their 2007 forecast for 2030.
"Global oil demand will grow relatively healthy in the first part of the forecast period before peaking in the second half of the year," said the report, which covers the period 2019-2045.
"Future demand is likely to continue to remain below previous projections due to the ongoing impact of the COVID-19-related shutdowns and their impact on the global economy and consumer behavior."
While oil consumption for automobiles, trucks and industry will rebound as economies recover, OPEC expressed concerns that future growth could be driven in part by factors such as a post-pandemic shift to homework and conference calls on commuting, as well as efficiency improvements and relocation Cars could be balanced on electricity.
Even before the pandemic, increasing climate activism in the West and the increasing use of alternative fuels took a closer look at the strength of long-term oil demand. Despite the reduction in forecasts, OPEC continued to grow.
This year, demand could gradually decline after 2030 due to developments such as faster adoption of electric cars, higher fuel efficiency and greater reductions in business and leisure travel after the pandemic.
This scenario, the case of accelerated politics and technology, is not based on major technological breakthroughs, according to OPEC, nor does it represent a total reduction in demand that is possible.
"There is ample scope for far broader implementation of energy efficiency measures that could potentially push future oil demand to much lower levels," OPEC said.
NEAR-TERM DEMAND REBOUND
OPEC was concerned that the pandemic could permanently hit demand, which current and former officials say could put the oil price under pressure and challenge its efforts to balance the market.
This year, OPEC, along with Russia and other allies, a group known as OPEC +, agreed record production cuts of 9.7 million bpd, equivalent to 10% of global supply.
Unlike some others, OPEC still sees an increase in oil demand in the next few years.
Oil consumption will rise to 97.7 million bpd next year, reach 99.8 million bpd in 2022 - above 2019 levels - and rise to 102.6 million bpd by 2024, he predicts. The number for 2024 is below the forecast of the previous year.
OPEC forecast that it will pump more than 30.7 million bpd this year in 2021. However, the increasing supply from the US and other external manufacturers means that OPEC production is expected to be 33.2 million bpd in 2025, below the 2019 level.
In the longer term, oil demand is expected to reach 109.3 million bpd in 2040 and decline slightly to 109.1 million bpd by 2045.
OPEC said the pandemic had accelerated the trend towards lower oil consumption in the countries of the industrialized Organization for Economic Cooperation and Development and growth outside the OECD.
Electric cars are gaining in share and there is "a constant improvement in battery economy," said OPEC. By 2045 they will make up over 27% of new cars worldwide.
Still, OPEC continues to hope to increase production over the coming decades as competitive production declines.
"Oil will continue to make up the largest share of the energy mix until 2045," wrote OPEC Secretary General Mohammad Barkindo in the foreword to the report.
(Adaptation by Jan Harvey)
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