IEA: Global Crude Demand to Endure Wave of Electric Cars

Crude oil is extracted from the Monterey Shale formation near Bakersfield California

"Meeting this demand would require an overall investment of around $10.5 trillion across upstream, midstream and downstream operations" Opec Secretary-General, Mohammad Barkindo, said noting that the 2017 outlook was more positive than a year ago, partly thanks to oil exporting nations' efforts to stabilise the market.

In its drilling productivity report for this month, the U.S. Energy Information Administration said it expected oil production from the seven main inland shale basins to increase about 1.3 percent in December.

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an worldwide oil conference.

The report from the Paris-based agency will come as grim news for officials attending global climate talks in Bonn, Germany, as they grapple with ways to contain carbon emissions.

This sentiment comes in part on the back of rising US oil output, which has grown by more than 14 percent since mid-2016 to a record 9.62 million bpd.

Having said that, the IEA points out that over the next 25 years, the world's growing energy needs will be met first by renewables and natural gas "as fast-declining costs turn solar power into the cheapest source of new energy electricity generation".


Oil prices held largely steady on Tuesday as the prospect of further rises in USA output offset some of the optimism that OPEC-led production cuts would tighten the balance between crude supply and demand.

Moreover, the revision for 2018, while "not very large" on average for the full year, came mostly on the back of lower-than-expected demand in the fourth quarter, which would come 311,000 bbl/day lower.

A cooling Chinese economy also stoked some concerns about demand, although so far the country's refiners are processing crude oil near record levels of 11.89 million bpd.

The oil market should be able to find a longer-term equilibrium, with the oil price in the range of $50-70 a barrel, the agency said.

Chris Watling, CEO and chief market strategist at Longview Economics, was quoted as saying that the adoption of EVs could lead to global peak oil demand as soon as 2023, which will result in oil prices crashing to $10.

Geopolitical tension in the Middle East and intermittent supply outages in the likes of Nigeria and Iraq have pushed oil above $60 a barrel for the first time since 2015, while global inventories have fallen, prompting many market watchers to raise their price forecasts. Global energy demand is 30 per cent higher by 2040 - but still half as much as it would have been without efficiency improvements.

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