OPEC has launched its 2017 World Oil Outlook (WOO) at the OPEC Secretariat in Vienna, Austria.
The WOO highlights the multi-faceted nature of the oil industry and the continued interdependence of all nations and the impact of the ongoing market rebalancing process, specifically on the medium-term outlook. The WOO suggests that oil will remain a fuel of choice for the foreseeable future and that security of supply and security of demand are very much two sides of the same coin. It also highlights the importance of exploring and evaluating the possible challenges, uncertainties, as well as opportunities, the industry might face.
The WOO notes that total primary energy demand is set to increase by 35% in the period to 2040. Oil is expected to remain the fuel with the largest share in the energy mix throughout the forecast period. Other highlights include the following:
- Long-term oil demand has been revised upward by 1.7 million bpd compared to the WOO 2016, with total demand at over 111 million bpd by 2040.
- There is no expectation for peak oil demand over the forecast period to 2040.
- Developing countries will continue to lead demand growth, increasing by almost 24 million bpd, to reach 67 million bpd by 2040.
- Long-term demand growth comes mainly from the road transportation, petrochemicals and aviation sectors.
- Non-OPEC liquids supply is forecast to increase from 57 million bpd in 2016 to 62 million bpd in 2022, but in the long-term non-OPEC liquids output is anticipated to see a decline, dropping to 60.4 million bpd by 2040, with US tight oil estimated to peak just after 2025.
- The demand for OPEC crude is anticipated to expand to 41.4 million bpd by 2040.
- The share of OPEC liquids in total global liquids supply is estimated to increase to 46% by 2040, from 40% in 2016.
- Around half of the estimated refining capacity additions are expected in the Asia-Pacific, which is projected to add 9.5 million bpd by 2040.
- Capacity rationalisation remains a long-term requirement, with some 6 - 8 million bpd of closures indicated as needed by 2040 if refining regions are to maintain utilisation rates of at least 80%.
- Global crude movements are expected to increase by around 6.5 million bpd between 2016 and 2040, mostly supported by Asia-Pacific imports and Middle East exports.
- In the period to 2040, the required global oil sector investment is estimated at US$10.5 trillion.
His Excellency Mohammad Sanusi Barkindo, OPEC Secretary General, said: “The past year has been an historic one for OPEC and the global oil industry. Since publication of the WOO 2016 in early November last year, the oil market has undergone fundamental change. It has been a period where the rebalancing of the global oil market has gathered vital momentum, buoyed by a number of important factors.”
He reiterated the importance of the landmark ‘Declaration of Cooperation’ of 24 participating OPEC and non-OPEC nations in driving the rebalancing process, with the high conformity levels to the production adjustments evidence of the major commitment to restore sustainable oil market stability in a stable manner. He added that “we need to remember that the short-, medium- and long-terms are all intertwined”, which is underscored in the WOO 2017.
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