OPEC Looks Ahead and Sees Oil's Plateau
(Bloomberg Opinion) -- The Organization of the Petroleum Exporting Countries this week published its annual World Oil Outlook, a reliably huge and dense examination of the future of the cartels main product, as well as the markets that will drive its growth and compete against it. Bloomberg Opinions Liam Denning referred to this years outlook as dour and, in the medium term, even despairing of its members contribution to the global supply of crude oil, natural gas liquids and other liquid fuels. Lets examine OPECs views on hydrocarbon demand, key sectors and the future of energy in general.
While the global oil market is reliably huge, in OPECs view, parts of it are soon to be ex-growth, and by 2040 the end of its forecast global demand will hardly grow at all. Starting in 2020, oil demand growth in OECD countries turns negative. India and China are reliable growth markets throughout, though to a declining degree, while demand from Organization for Economic Cooperation and Development countries continues to erode. The net result is that oil demand is expected to grow by only 100,000 barrels per day in 2040, in a market with daily demand in excess of 110 million barrels. A 0.09% growth rate is very close to no growth at all.
Demand growth is also highly concentrated in just a few sectors. Road transport, the largest chunk of oil demand today, and petrochemicals, the second-largest, also account for almost 60% of total demand growth. In terms of relative growth, though, aviatio....