Opec cut its forecast for medium to long term growth in global oil demand

[ Time:2019-11-11 | Hits:75 ]

In its closely watched annual WOO report, Opec on Tuesday cut its forecast for global medium - and long-term oil demand growth, citing grim market conditions, "signs of downward pressure" in the world economy and "challenging" energy markets.
"There are already signs of stress in the global economy and the outlook for global growth has been revised down several times, at least in the short and medium term," Opec said.
As a result, Opec cut its forecast for global oil demand growth to 103.9 million barrels a day by 2023, down from 104.5 million barrels a day last year. Oil demand is forecast to grow by 12 million BPD by 2040, down from 111.7 million BPD last year.
Opec said it expected oil demand to continue to grow at a "relatively healthy rate" over the next five years, with 6.1 million barrels per day more than in 2018.
Opec said it raised its outlook for non-opec oil supply growth in the medium term, forecasting Opec oil production to fall to 32.8 million barrels a day by 2024 from 35 million barrels a day in 2019 due to increased production from other producers.
India is seen as the country with the fastest growth in oil demand and the biggest new demand in the next 20 years.
"Globally, growth is expected to fall from 1.4m b/d in 2018 to about 500,000 b/d by the end of the next decade," Opec said in its report.
The report presents a medium - and long-term analysis of the energy market by the OPEC secretariat and forecasts for the global economy.
The report comes at a time when many energy market participants are increasingly concerned about rising supply and weak demand, which contributed to a sharp decline in crude oil futures from mid-2014 to 2016.
International benchmark prices have fallen nearly 30 per cent since brent futures climbed to a peak of just over $86 in October 2018. West Texas intermediate is down nearly 20 percent over the same period.
Brent crude traded at $62.31 a barrel on Tuesday, compared with $56.65 for U.S. WTI.
Mr Atkinson of the international energy agency said Opec and its Allies, sometimes known as Opec, would have to decide whether further cuts were necessary when they met in early December.
Global energy mix
Oil accounted for more than 31 percent of global energy demand in 2018, ahead of coal (27 percent) and natural gas (23 percent), according to the report.
And over the next 20 years, oil is expected to continue to be the largest contributor to the energy mix, accounting for more than 28 percent.
According to Opec projections, natural gas is expected to become the second largest source of energy, accounting for 25 percent of the total primary energy supply by 2040.
"The growth in gas demand will mainly come from Asian countries, led by China and India," Opec said.
Global carbon emissions climbed to a record high last year, despite a United Nations report warning that greenhouse gas emissions must be cut over the next 12 years to stabilize the climate.