'Oil era is far from over,' says IEA's annual report

Share

IEA said it had cut its longer-term oil price projections from a year ago, partly because of the falling cost of both renewable and conventional sources of energy, the worldwide push to tackle climate change and improve air quality and the boom in USA shale oil and gas output.

The IEA's 2017 World Energy Outlook finds that global energy markets will be shaped by four major trends over the next three decades: The United States will become the world's leading producer of oil and natural gas; renewable energy, led by a major expansion of solar power in China and India, will experience rapid growth; the share of electricity - and electric vehicles - in the energy mix will expand; and China's continuing economic expansion will increasingly be fueled by clean energy.

Under its "New Policies Scenario", based on existing legislation and announced policy intentions relative to emissions and climate change, the oil price should continue to rise towards $83 a barrel by the mid-2020s.

The IEA also revised down its 2018 oil demand forecast for Brazil from 3.15 million bpd to 3.13 million bpd.

The IEA delivered a surprisingly downbeat outlook for oil demand in its monthly market report, showing an expected slowdown in consumption that was at odds with a more bullish view from the producer group OPEC on Monday.

Global oil supply rose by 100,000 bpd in October to 97.5m bpd on higher production from non-Opec countries, and non-Opec oil supply is expected to rise by 700,000 bpd this year and 1.4m bpd next year, led by stronger output in the US.


For all of 2017, total demand is now forecast at 97.7 million barrels a day, up by 1.5 million barrels a day (1.6%) compared to 2016. Refined products inventories are also expected to rise.

"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.

Fitch Ratings said in its 2018 oil outlook that it assumed 2018 "average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained". The figure was even lower based on secondary sources rather than what the government reports, at 1.863 million bpd in October, according to Opec.

After an upbeat performance last week, oil prices edged lower for a second day Tuesday.

Global demand is forecast to be 30 percent higher by 2040, but still half as much as it would be without efficiency improvements.

Share