By November 7, 2017 0 Comments Read More →

Oil demand could plateau in 2030’s due to EVs: OPEC

oil demand

OPEC expects is share of global oil demand to reach 46 per cent in 2040 from its current 40 per cent share. Shutterstock photo.

OPEC oil demand to reach 33.10 million bpd in 2019: Report

In a report by OPEC, the cartel says if consumers rapidly adopt electric vehicles, world oil demand will reach a plateau during the second half of the 2030’s.

“In just a few years, EVs have gone from being completely unaffordable, impractical and not particularly nice, to representing a valid option for a niche pool of customers,” OPEC said in the report.

According to the report, global crude demand will rise to 111.1 million barrels per day (b/d) by 2040, however, that could end up being lower, perhaps down to 108.60 million b/d, if EVs prove to be more popular than assumed in the report’s reference case.

“Moreover, global oil demand is estimated to plateau around this level in the second half of the 2030s,” OPEC said.

Despite the forecast, Reuters reports OPEC is not panicking, arguing it oil use is not expected to peak soon and the cartel expects its market share to grow to 46 per cent in 2040 from 40 per cent in 2016.

“There is therefore no peak oil demand for the foreseeable future,” Reuters reports OPEC Secretary-General Mohammad Barkindo told a news conference.

The report says demand for OPEC crude will rise to 33.1o million b/d by 2019, up from 32.70 in 2016.  In last year’s report, the 2019 estimate was 33.70 million b/d.

The report also said that while oil demand is expected to rise in the coming two years, demand for OPEC’s crude will be grow slower than expected as the recovery in oil prices will encourage output growth from non-cartel suppliers.

OPEC forecasts the supply of tight oil, including US shale will rise as Russia and Argentina join the US in producing tight oil. By 2020, output is expected to reach 7.0 million b/d and 9.22 million b/d in 2030.

According to Reuters, OPEC’s forecasts for tight oil production in last year’s report were 4.55 million b/d by 2020 and 6.73 million b/d by 2030.

“The medium-term outlook for non-OPEC liquids growth has changed quite considerably,” OPEC said in the report, referring to its 2016 forecasts. “Most strikingly, US tight oil production has exceeded previous growth expectations.”

Oil prices hit their highest levels since mid-2015 on Monday, trading over $62/barrel.  The cartel did not offer any future oil price assumptions.  Last year, OPEC assumed prices for its basket of crude oils would reach $65 in 2021.

 

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