IEA oil demand forecast scaled back

IEA oil demand forecast scaled back

The second development, which has already dented the Canadian oilpatch, is the rise of USA tight oil and gas that is taking dollars and focus away from the Western Canadian industry.

A more widespread use of electric cars will not be enough to consign oil to the past, said the energy agency's executive director, Fatih Birol.

"The recent price support, namely the tension in the Middle East, has been swept aside as rising rig counts and US shale output (are) in the focus of traders", PVM Oil Associates analyst Tamas Varga said. It expects global demand for oil to even rise in the decades ahead.

"Over the same period, United States gas companies ramped up their exports to Canada and Mexico, pushing net USA imports of pipeline gas down to around 25 bcm in 2016, compared with 80 bcm some ten years earlier", IEA economists said.

The International Energy Agency said in its market report for November that recent trends toward balance were supported by lower production from OPEC members like Iraq and Venezuela, which may be temporary.

With the US eating into Canada's prospective market share, the IEA believes Canada's liquefied natural gas export will likely not come to fruition until the 2030s - a decade longer than expected - even as LNG will usher in a "new global gas order".

Total energy demand is expected to grow by 30 percent by 2040 - and would be growing twice that without efforts to improve energy efficiencies.

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Climate activists said the IEA report is too negative, but added that it highlights the need for more action to combat climate change.

Canada could still play a role as China's long-held fears for its energy security means it would seek to diversify its sources of supply.

The Paris-based IEA revised demand growth down by 100,000 barrels per day (bpd) for both 2017 and 2018, for an increase of around 1.5m bpd this year, to 97.7m bpd, and 1.3m next, to 98.9m bpd, which could push the market back into a surplus in the first half of next year.

"Next year's demand growth will struggle to match this", the IEA said.

Oil-dependent Venezuela's crude output dipped last month below 2 million barrels per day, its lowest level in almost three decades, global producer group Opec said on Monday.

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".

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