The world is going to guzzle even more oil, according to the latest five-year market outlook from the Organisation of Petroleum Exporting Countries (OPEC).
This is a U-turn from last year’s report which bemoaned a drop in demand.
OPEC reckons that businesses and consumers will want an extra million barrels a day by 2020, pushing demand up to 33.7 million barrels a day.
OPEC supplies around a third of the world’s oil. The organisation is a trade body for countries such as the Gulf States, African oil producers and others around the world, such as Venezuela.
The key oil big producers of the US and Russia are not represented by OPEC.
Modest increase in output
The increase in demand is modest – only 300,000 or so barrels a day than OPEC is pumping out of the ground today.
And the report predicts no growth until at least 2021.
OPEC refused to cut production as the price of oil slumped from more than $100 a barrel two years ago to around $48 a barrel today.
The move has triggered a glut, with oil stored in tankers taken out of mothballs as OPEC tried to muscle shale oil in the US and Canada out of the market.
OPEC also reports that demand for oil is expected to reach a peak in 2030 at 6.73 million barrels a day – well up from the 2015 forecast of 5.61 million barrels a day.
Demand to peak before supply
The research also predicts the OPEC share of the market will increase over the next decade as shale oil becomes too expensive to compete and drops out of contention.
The report also expects the price of oil to rise to around $60 a barrel by the end of 2020
However producer BP reckons demand will peak before supply due to efforts to bring more nuclear power online and an increase in supplies of natural gas and renewable energy.
“While the recent oil market environment has been one of oversupply, it is vital that the industry ensures that a lack of investments today does not lead to a shortage of supply in the future,” said OPEC Secretary-General Mohammed Barkindo.