$10 Trillion in global oil-related investment will be needed to Meet Demand: OPEC
Supply: non-OPEC supply down 1 MMBOD by 2020; OPEC supply up 1 MMBOD by 2040
OPEC’s press release announcing the coming 2015 release of its annual World Oil Outlook tomorrow says “the dynamics of non-OPEC supply are currently clouded by uncertainties.” But the cartel said it feels good about its medium- to long-term analysis that’s coming in tomorrow’s report, and offered the following summary of its projections.
Summary of tomorrow’s 2015 World Oil Outlook
Highlights of the cartel’s predictions follow (full report available Dec. 23):
- Global energy demand is set to increase by almost 50% in the period to 2040, with the overall energy mix continuing to be led by fossil fuels at almost 78%;
- Combined, oil and gas are expected to supply around 53% of the global energy demand by 2040;
- Medium-term oil demand is revised upward, compared to the WOO 2014, rising above 97 million barrels a day (mb/d) by 2020;
- Oil demand is projected to be at 110 mb/d by 2040;
- Long-term demand is dominated by the developing Asia region, which accounts for 70% of the increase by 2040;
- Non-OPEC liquids supply increases from 56.5 mb/d in 2014 to around 60 mb/d in 2020, a downward revision of 1 mb/d compared to the WOO 2014. By 2040, non-OPEC liquids supply falls below 60 mb/d;
- OPEC crude expands by 10 mb/d to a level of 40.7 mb/d by 2040 – an increase of 1 mb/d compared with last year’s publication;
- The long-term value of the OPEC Reference Basket is assumed to rise from more than $70/b in 2020 to $95/b by 2040 (both in 2014 dollars). It is important to stress, however, that the assumed prices do not represent a price forecast or a desired price path. They are a working assumption for the Reference Case scenario;
- At the global level, oil-related investment required to cover future demand for oil over the forecast period 2015–2040 is estimated at almost $10 trillion, in 2014 prices;
- A review of existing refinery projects indicates that around 7 mb/d of new distillation capacity will be added globally in the period 2015–2020;
- Surplus refining capacity in the medium-term has eased over the past year; but the outlook continues to point to a period of competition for product markets and the need for additional closures remains;
- Required cumulative distillation capacity additions are projected to be around 20 mb/d by 2040.
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