OPEC Lowers Medium-Term Global Demand Forecast for its Oil as Shale Production Rises
Medium-term global demand for OPEC’s crude will rise slower than previously expected, according to the group’s forecast in its latest World Oil Outlook, Reuters reports. Demand for OPEC crude will reach 33.1M b/d in 2019, 1.2% or 0.4M b/d more than the corresponding demand in 2016, but 1.7% or 0.6M b/d less than OPEC’s estimate for 2019 in last year’s report. The slower growth in demand for OPEC’s oil reflects the recovery in prices driven by the OPEC/non-OPEC supply curbs which has stimulated renewed output growth from non-members. For example, shale oil production is estimated to reach 7M b/d by 2020 and 9.22M b/d by 2030, compared to last year’s estimates of 4.55M b/d and 6.73M b/d respectively.
Indeed, OPEC has increased its global oil demand forecast for 2022 to 102.3M b/d, up by 2.4M b/d from last year’s report and compared with an estimated 96.8M b/d in 2017. Long-term global demand was also revised upwards at 111.1M b/d in 2040 from 109.4M b/d expected last year. The growth rate will decelerate, however, from nearly 1.5M b/d in 2017 to 0.81M b/d in 2022 and 0.3M b/d by 2040, amidst an intensifying clean energy push and the gradual rise of electric vehicles. Meanwhile, OPEC’s share of the world oil market is expected to rise to 46% from 40% in 2016, despite the rising near term production from competitors.