The difference between supply and demand isn't as tight as "some would like", the IEA added. While OPEC in their monthly report expects to see a larger oil supply deficit in 2018, the International Energy Agency (IEA) sees the appetite and an oil market oversupplied in the first half of 2018.
Under its "New Policies Scenario", based on existing legislation and announced policy intentions relative to emissions and climate change, the oil price should continue to rise towards $83 a barrel by the mid-2020s.
The forecasts are also underpinned by some major assumptions: The report assumes that governments stick to promises they've made on energy, including pledges by India and China to move away from fossil fuels. That means that, despite the rapid deployment of wind and solar power worldwide, global Carbon dioxide emissions will continue to rise until 2040, "far from enough to avoid the severe impacts of climate change", the IEA said. "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 past year, partly thanks to oil exporting nations' efforts to stabilise the market.
"The U.S. [shale] oil industry avoided the blow by morphing into a leaner, more agile version of its former self; it has since proved remarkably resilient to lower prices", the IEA said.
"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.
Increased oil production from countries not in the OPEC cartel had helped push global output higher in October, the report said.
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The United States can look forward to many more years of an unprecedented oil and gas boom.
Oil inventories in the world's richest nations fell by 40 million barrels in September, breaking below 3.0 billion barrels for the first time in two years, driven in part by Hurricane Harvey, which shuttered much USA refining capacity in August. Forecasts for shale-oil output in 2025 were bolstered by 34 per cent to 9 million barrels a day.
Lower prices are helping to support oil demand, and the IEA raised its projections for global consumption through to 2035, despite the growing popularity of electric vehicles.
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.
At the same time, the renewable energy sources will become more important.
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