 "oil")
OPEC raised its forecasts for world oil demand in the medium-and longer-term in an annual outlook released on Monday and said$12.1 trillion of investment is needed to meet this demanddespite the energy transition.
The view from the Organization of the Petroleum ExportingCountries, in its 2022 World Oil Outlook, contrasts with that ofother forecasters which see oil demand reaching a plateau before2030 due to the rise of renewable energy and electric cars. Another decade of oil demand growth would be a boost forOPEC, whose 13 members depend on oil income. The group has beenarguing that oil should be part of the energy transition and that focus by investors on economic, social and governance(ESG) issues has worsened an investment shortfall. "The overall investment number for the oil sector is $12.1trillion out to 2045," OPEC Secretary General Haitham Al Ghaiswrote in the foreword to the report, which said the figure wasup from last year's estimate. "However, chronic underinvestment into the global oilindustry in recent years, due to industry downturns, theCOVID-19 pandemic, as well as policies centred on endingfinancing in fossil fuel projects, is a major cause of concern." OPEC made a shift in 2020 when the pandemic hit demand,saying it would eventually slow after years of predictingever-increasing consumption. In the report, OPEC maintained its view that world demand will plateau after 2035.
Other predictions from companies and banks see oil demand peaking earlier. The International Energy Agency on Thursday for the first time in its history of modelling said demand for all fossil fuels was set to peak, with oil demand levelling off in the middle of the next decade. ENERGY SECURITY DEMAND BOOST The report said world oil demand will reach 103 millionbarrels per day in 2023, up 2.7 million bpd from 2022. The 2023total demand is up 1.4 million bpd from last year's prediction. OPEC also raised its demand forecasts for the medium term to2027, saying the figure is up by almost 2 million bpd by the endof the period from last year. It said the upward revision reflects a more robust recoverynow seen in 2022 and 2023 and a "strong focus on energy securityissues" leading to a slower substitution of oil by other fuelssuch as natural gas, whose price has soared due to Russia'sinvasion of Ukraine. By 2030, OPEC sees world demand averaging 108.3 million bpd,up from 2021, and lifted its 2045 figure to 109.8 million bpdfrom 108.2 million bpd in 2021. The group had lowered the 2045projection over the last few years. OPEC and its allies, known as OPEC+, are again cuttingsupply to support the market. The report sees supply restraint continuing in the medium term, with OPEC output in 2027 lower than in 2022 as non-OPEC supply grows. Still, OPEC is upbeat about its later prospects, seeing itsmarket share rising. U.S. tight crude supply is seen peakingafter the late 2020s, rather than around 2030 last year. "Oil is expected to remain the number one fuel in the globalprimary energy mix," the report said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
