Global crude oil demand to ease on warm climate

US on the cusp of history's biggest oil and gas boom, IEA forecasts

US on the cusp of history's biggest oil and gas boom, IEA forecasts

U.S. West Texas Intermediate (WTI) crude was at $56.72 per barrel, down 4 cents.The dips came after both crude benchmarks early last week hit highs last seen in 2015, but traders said the market had lost some momentum since then."Oil is fairly calm".

"Oil is already facing stiff competition from ever-cheaper and more environmentally friendly energy sources as traditional fossil fuel users switch to cleaner, low-carbon alternatives", IEA said in its World Energy Outlook 2018. "This is a continuation of the strong demand growth we are seeing in our short term oil market analysis", the report said.

The International Energy Agency said in its market report for November that recent trends toward balance were supported by lower production from OPEC members like Iraq and Venezuela, which may be temporary. 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.

Hurricane Harvey contributed to a sharp decline in industry stocks held in developed nations grouped together in the OECD, the IEA said, adding this contributed to worldwide oil stocks seeing a quarterly decline for only the second time in the past two years. "There's big growth coming from shale oil, and as such there'll be a big difference between the US and other producers".

Increased oil production from countries not in the OPEC cartel had helped push global output higher in October, the report said.

"It's quite spectacular, because you're going to see the number of cars on the road double from one billion to 2 billion, thanks to electric vehicles and fuel economy standards", said Laura Cozzi, head of the Energy Demand Outlook division. Forecasts for shale-oil output in 2025 were bolstered by 34 per cent to 9 million barrels a day.

Reflecting the expected flood of supply, the agency cut its forecasts for oil prices to $83 (U.S.) a barrel for 2025 from $101 previously, and to $111 for 2040 from $125 before.

Christopher Kuplen, BofAML's Research Analyst, argues that since 55 per cent of global oil is consumed in transportation, of which more than half by passenger vehicles, the demand for oil would eventually fall.

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.