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There Will Be Huge Rise In Global Crude Demand In 5 Years Time: Opec

There Will Be Huge Rise In Global Crude Demand In 5 Years Time: Opec
A report by the oil carter Opec predicts that in the next five years, there would be a drastic increase in demand for petroleum – offsetting decrease in demand because of electric vehicles, which would see global crude production reaching record highs.
Significant upward revision of estimates for global oil production was made in the Opec report which experts say is contrary to the theory which estimates that oil company reserves will become “standard assets” and this is the reason that many environmentalists would be dismayed by the prediction. 
While China and India would be the leaders in demand for crude, on the production side, non-Opec producers would lead the production increase such as frackers in the United States.
Increased demand in transportation and petrochemicals sectors would see demand for oil globally reaching almost 112m barrels per day by 2040, says the Opec report. To put the number into perspective, the current production rate is nearly 100m bpd and would be more than the production last year.
The report also mentioned that despite the concerns of global warming, there would be record usage of coal as a fuel source. It also predicts that while there would be a decrease of one third in consumption of coal in OCED countries by 2040, there would be a 20 per cent increase in coal consumption in developing countries, so much so that it would be five times the amount consumed in the developed countries.
There would be an increase of 2.2 per cent increase in yearly demand till 2040 for oil by the world’s airlines which would be the fastest growing demand segment. But the road transport segment would note the largest absolute growth, the report noted.
By 2040, there would be an increase in the number of vehicles on roads globally from the current number of 1.1bn to about 2.4bn. the report further notes that of that number, just 320m of those vehicles would be electrically powered. The report also however predicts that if the electric vehicle segment does significantly well, the number of electric vehicles could reach 720m by 2040. But if there is no high growth of the electric vehicle segment, the demand for crude oil would only fall marginally 109m bpd instead of the over 111.7m bpd by 2040.
The share of diesel vehicles for the future was downgraded in the Opec report primarily due to the outcome of the dieselgate scandal and the strategy of many large car makers getting into the electric vehicle announced in the last one year.
The report further says that there would also be steep rise in the production of renewable energy but till 2040, even a significant increase would account for only about 20 per cent of the total global energy requirement.
The Opec report however make no mention of crude price forecasts.

Christopher J. Mitchell

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