OPEC lowers global oil demand growth forecast

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VIENNA

The Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for global medium- and long-term oil demand growth on Tuesday, citing difficult market situations and challenges faced by the world economy. Signs of stress have appeared in the global economy, and the outlook for global growth, at least in the short and medium term, has been revised down repeatedly over the past year, according to OPEC’s annual World Oil Outlook (WOO) published here on Tuesday.

As a result, this year WOO has lowered its outlook numbers for global oil demand growth, to 104.8 million barrels per day (b/d) by 2024, and 110.6 million b/d by 2040.

The 14-nation cartel also said that its own production of crude oil and other liquids is expected to decrease over the next five years, falling to 32.8 million b/d from 35 million b/d in 2019. OPEC, Russia and other producers have been largely limiting oil supply since Jan. 1, 2017 in order to boost price. The alliance, known as OPEC+, has renewed the pact until March 2020.

Non-OPEC supply prospects have been revised up sharply, as U.S. tight oil (also known as shale oil), in particular, has again outperformed expectations, OPEC Secretary-General Mohammad Barkindo wrote in the foreword of the report. Given increased production efficiency of tight oil, its growth is expected to continue, he said, and other sources of non-OPEC supply including Norway, Brazil and Guyana, will also likely have a medium-term impact.

He also noted that in the long-term, however, it is OPEC that will be expected to meet the majority of oil demand requirements, and demand for its liquids will rise to 44.4 million b/d by 2040. Total primary energy demand is expected to increase by 25 percent between 2018 and 2040 with renewables leading the way in terms of growth, according to the WOO.

The report also suggests that oil and gas are still expected to meet more than 50 percent of the world’s energy needs by the end of the forecast period. First published in 2007, the WOO offers a thorough review and assessment of the medium- and long-term prospects to 2040 for the global oil industry, as well as analysis of various sensitivities that have the potential to impact the petroleum industry in the years ahead, according to OPEC.

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