Issue 121 – Oil Demand Still Peaking
Introduction…Reuters- The Paris Climate Change Agreement is not expected to reduce long-term oil demand according to The International Energy Agency (IEA,)
Oil demand peak…The IEA expects oil demand to peak sometime after 2040. The Paris accord attempts to wean the world off fossil fuels in the second half of the century. The demand for automobile fuel may drop, but other uses may rise in offset.
“The difficulty of finding alternatives to oil in road freight, aviation and petrochemicals means that, up to 2040, the growth in these three sectors alone is greater than the growth in global oil demand,” the IEA said in its annual World Energy Outlook.
Oil price to rise…“In the New Policies Scenario, balancing supply and demand requires an oil price approaching $80 a barrel in 2020 and further gradual increases thereafter,” the IEA said, leaving its price forecast under this scenario unchanged from last year’s World Energy Outlook.
In conclusion…The IEA is expecting the oil age still has many years to grow.