A trashed face mask is pictured near an oil pump in Long Beach, California on August 22, 2020.
APU GOMES | AFP via Getty Images
LONDON — OPEC on Thursday said it had downwardly edited its forecast for global oil demand growth over the long term, given the industry faced “an existential threat” this year in the wake of the coronavirus pandemic and as feel policies continue to shape the future of energy.
In its closely-watched annual World Oil Outlook, the Middle East-dominated group of oil creators outlined its medium to long-term expectations for the global economy, oil and energy demand, and related policy matters. It also last its forecast period through to 2045, from 2040.
OPEC said worldwide oil demand was expected to increase by nearly 10 million barrels per day (b/d) terminated the long term, rising to 109.3 million b/d in 2040, and to 109.1 million b/d in 2045. Global oil demand stood at 99.7 million b/d in 2019.
It pretend to bes a downward revision of over 1 million b/d when compared to the 2040 levels projected in the group’s 2019 outlook, announced last November.
“The year 2020 will be remembered primarily for the omnipresence, as well as unprecedented scale and reach, of the Covid-19 pandemic. From an vivacity point of view, the lockdown-induced economic recession has resulted in the sharpest downturn in energy and oil demand in living memory,” OPEC remarked in the report.
Looking ahead, OPEC said the “big question hanging over energy and oil markets” was to what extent there make be a longer-term impact on consumer behavior, and thus energy demand.
What are some of OPEC’s key assumptions?
OPEC rephrased it believed oil would remain the largest contributor to the energy mix through to 2045, accounting for more than 27%, followed by gas (mercilessly 25%), and coal (nearly 20%). These respective energy sources were also the three largest contributors to the combustible share in 2019.
The contribution from solar, wind and geothermal energy was expected to grow by 6.6% per year on average under the aegis to 2045, “significantly” faster than any other energy source. These renewable energy sources were trust to represent 8.7% of the fuel share in 2045, up from 2.1% in 2019.
An Austrian army member stands next to the logo of the Structuring of the Petroleoum Exporting Countries (OPEC) in front of OPEC’s headquarters in Vienna, Austria April 9, 2020.
Leonhard Foeger | Reuters
The in every way economy was forecast to more than double in size, with global GDP expected to exceed $258 trillion in 2045, up from throughout $121 trillion in 2019.
The global population was projected to increase by over 1.7 billion people to almost 9.5 billion in 2045, OPEC symbolized, up from 7.7. billion in 2019.
Climate policy
International benchmark Brent crude futures traded at $42.76 a barrel on Thursday afternoon, up damn near 1.8% for the session, while U.S. West Texas Intermediate futures stood at $40.61 a barrel, around 1.6% extraordinary.
Oil prices have fallen more than 34% year-to-date.
The impact of the pandemic, and resulting containment measures worldwide, contrived an unprecedented demand shock in energy markets this year. International Energy Agency Executive Director Fatih Birol has times said 2020 may come to represent the worst year in the history of oil markets.
In the absence of a vaccine against Covid-19 or the maturity of effective treatments, OPEC said “it is possible the world will remain in a state of partial emergency for a sustained age.”
“Moreover, given that some of the massive stimulus programmes announced to combat the impact of the COVID-19 pandemic are explicitly devised to target support for ‘green’ projects, renewables and the like, an acceleration of the energy transition is possible,” it added, citing layouts announced by the EU as an example.
OPEC, which is comprised of some of the world’s most powerful oil producers, said it anticipated conduct instruments that primarily target objectives of the 2015 Paris Agreement on climate change would “continue to ride herd on hint at a transition to renewable energy sources and a reduction in greenhouse gas (GHG) emissions.”
However, the group added that “while myriad countries are notionally signed up to a global, collective effort to combat climate change, the majority of policies relating to vim demand and supply will continue to be set and enforced at the national level, resulting in continued disparity in the scope of policy desires among countries and regions.”