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Oil to contribute 27 pct of energy supply by '40 - OPEC
November 15, 2017, 4:55 am

The global energy market has experienced significant changes since last November, which had an impact on medium- and long-term estimates, according to OPEC's World Oil Outlook (WOO) 2017.

The report showed that oil and liquefied natural gas would contribute 27 percent and 25 percent respectively to the energy supply by 2040 with the renewable energy representing the remaining percentage.

Long-term oil demand is expected to increase by 15.8 million barrels per day (mb/d), from 95.4 mb/d in 2016 to 111.1 mb/d in 2040, according to the WOO, released during Abu Dhabi International Petroleum Exhibition and Conference (ADIPEC) 2017 on Tuesday.

Demand in the Organization for Economic Cooperation and Development (OECD) region is anticipated to show a significant decline of 8.9 mb/d over the forecast period, the report says.

Driven by an expanding middle class, high population growth rates and stronger economic growth potential, Developing countries' oil demand is expected to increase by almost 24 mb/d.

Long-term global oil demand growth is forecast to decelerate steadily, falling from an annual average of around 1.3 mb/d during the period 2016-2020 to only 0.3 mb/d every year between 2035 and 2040.

This deceleration is a result of slowing GDP growth, assumed oil price increases, a structural shift of economies towards a more service-oriented structure, efficiency improvements as a result of tightening energy efficiency policies and/or technological improvements, and oil facing strong competition from other energy sources.

The medium-term oil demand outlook for the period 2016-2022 shows an increase of 6.9 mb/d, rising from 95.4 mb/d to 102.3 mb/d.

This corresponds to a healthy average annual increase of almost 1.2 mb/d. Demand in Developing countries is expected to be strong, increasing from 43.2 mb/d in 2016 to 49.6 mb/d in 2022.
Globally, oil demand has been revised upwards by 2.24 mb/d in 2022 compared to the WOO 2016.

This revision includes the upward shift to the baseline (+1.2 mb/d) in 2016. In addition, in this year's WOO, OECD regional oil demand is expected to grow until 2019, before the trend reverses. In last year's publication, OECD demand grew only until 2017.

Launching the report, Mohammad Sanusi Barkindo, OPEC Secretary-General, said: "Today, the oil industry, and indeed the global economy, are clearly benefiting from the noble efforts of this unprecedented joint decision of the 24 OPEC and non-OPEC participating producers of the Declaration of Cooperation."

"We are seeing clear indications that the market is rebalancing at an accelerating pace and stability is steadily returning. Based on our latest OPEC Monthly Oil Market Report published today, global stock levels are visibly down.

"The stock overhang since the beginning of this year alone has dropped by more than 180 mb. The global economic growth dynamic has continued its momentum with the forecast for 2017 revised up to 3.7 percent, and the economic outlook is positive into 2018, expected to remain at 3.7 percent.

"Global demand growth for oil is higher and robust, and is expected to remain above 1.5 mb/d for both 2017 and 2018, higher than in the previous assessment," the OPEC chief pointed out.

"I am certain that if we had not mobilized ourselves when we did, building consensus and jointly taking action in responding to the crisis, the industry would be in a different condition than it is today," he added.

The WOO 2017 expects that technical advancements will continue to evolve and change the future energy panorama. For example, the current development of renewable energies and the introduction of EVs (electronic vehicles) as a replacement for ICE (internal combustion engine) vehicles are strong signs of trends.

Elsewhere, highly resistant fibers in conjunction with oil-based resins are already replacing traditional metal-based materials in the case of latest-generation airplanes, to highlight another state-of-the-art development.

The Abu Dhabi International Petroleum Exhibition and Conference, the world's most influential oil and gas exhibition and conference, is being held at Abu Dhabi National Exhibition Centre from November 13 to 16.

Source: KUNA

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