By Alex Lawler
LONDON (Reuters) -OPEC raised its forecasts for world oil demand for the medium and long run in an annual outlook, citing progress led by India, Africa and the Center East and a slower shift to electrical autos and cleaner fuels.
The Group of the Petroleum Exporting Nations, in its 2024 World Oil Outlook revealed on Tuesday, sees demand rising for an extended interval than different forecasters like BP (NYSE:) and the Worldwide Power Company, which see oil use peaking this decade.
An extended interval of rising consumption could be a lift for OPEC, whose 12 members rely upon oil earnings. In assist of its view, OPEC stated it anticipated extra push again on “formidable” clear power targets, and cited plans by a number of world carmakers to scale down electrification objectives.
“There isn’t a peak oil demand on the horizon,” OPEC Secretary Normal Haitham Al Ghais wrote within the foreword to the report being launched in Brazil, a non-member of OPEC with which the group is searching for to type nearer ties.
“Over the previous yr, there was additional recognition that the world can solely part in new power sources at scale when they’re genuinely prepared.”
OPEC expects world oil demand to achieve 118.9 million barrels a day (bpd) by 2045, round 2.9 million bpd greater than anticipated in final yr’s report. The report rolled out its timeline to 2050 and expects demand to hit 120.1 million bpd by then.
That is far above different 2050 forecasts from the business. BP tasks oil use will peak in 2025 and decline to 75 million bpd in 2050. Exxon Mobil (NYSE:) expects oil demand to remain above 100 million bpd by 2050, just like at present’s degree.
OPEC has been calling for extra oil business funding and stated the sector wants $17.4 trillion to be spent to 2050, in contrast with $14 trillion wanted by 2045 estimated final yr.
“All policymakers and stakeholders have to work collectively to make sure a long-term investment-friendly local weather,” Al Ghais wrote.
HIGHER 2029 FORECAST THAN IEA
OPEC additionally raised its medium time period demand forecasts, citing a stronger financial backdrop than final yr as inflation strain wanes and central banks begin to decrease rates of interest.
World demand in 2028 will attain 111 million bpd, OPEC stated, and 112.3 million bpd in 2029. The 2028 determine is up 800,000 bpd from final yr’s prediction.
OPEC’s 2029 forecast is greater than 6 million bpd greater than that of the IEA, which stated in June demand will plateau in 2029 at 105.6 million bpd. The hole is bigger than the mixed output of OPEC members Kuwait and the United Arab Emirates.
In 2020, OPEC made a shift when the pandemic hit oil demand, saying consumption would plateau within the late 2030s. It has begun elevating forecasts once more as oil use has recovered.
By 2050, there will likely be 2.9 billion autos on the street, up 1.2 billion from 2023, OPEC forecast. Regardless of electrical car progress, autos powered by a combustion engine will account for greater than 70% of the worldwide fleet in 2050, the report stated.
“Electrical autos are poised for a bigger market share, however obstacles stay, equivalent to electrical energy grids, battery manufacturing capability and entry to vital minerals,” it stated.
OPEC and its allies, often called OPEC+, are reducing provide to assist the market. The report sees OPEC+’s share of the oil market rising to 52% in 2050 from 49% in 2023 as U.S. output peaks in 2030 and non-OPEC+ output does so within the early 2030s.
