By Victor Ochieng
This is particularly so because of the exponential growth in the U.S. tight oil supplies. According to the body’s annual report released Wednesday, besides having to wait longer for a gain in oil prices, natural gas is also forecasted to become the number one global fuel by 2040.
The World Oil Outlook (WOO) for 2015 states that the global energy consumption from now through 2040 is set to rise to a third of the rate experienced through the period from 1970 to 2013. There is a growing fall in demand and increasing supply outside the traps of oil cartels, something that makes it impossible for the markets to return to what they were before 2014.
WOO researchers have revealed that U.S. unconventional output has dropped by around 500,000 barrels per day in 2015 compared to last year, although the researchers say that the drop is only temporary. The expected rise in production is pegged on the gradual rise in demand.
The output of both U.S. Domestic shale and Canadian oilsands is expected to see an uptick of close to 1.7 million barrels per day by 2020. There is, however, an expected drop in production in other regions such as Mexico, Russia, and Europe, as well as some other regions that don’t fall within the 13-member oil cartel.
As OPEC seeks to raise its global share in oil control, it’s expected to command 37% control in 2040, up from the 33% it commanded last year.
On the other hand, WOO forecasts that by 2020 the oil demand by developed nations will drop by 200,000 barrels per day, while there will be a 7% increase in overall demand to 97.3 million.
This year’s dynamics in the crude oil markets is expected to make an impact on the global market by trimming capital expenditure by a significant 20%. The slump in the global crude oil prices has led to a $200 billion halt of possible projects such as new oilsands and deepwater development.
In 2016, the demand for oil is expected to settle around 30.9 million barrels per day on average, which is expected to drop to 30.7 million in 2020.
“The past year has been a test for all producers and investors, who have had to face up to the realities of a shifting global oil industry,” OPEC Secretary-General Abdullah al-Badri said. “It begs the questions: what lessons can the industry take away from the past 12 months or so, and how might these recent events alter the outlook for the oil market in the years and decades ahead?”
Although the past one year has had ups and downs in different regions, OPEC foresees a better economic growth rate in the coming year. The economic growth for 2015 is estimated at 3.2%, a rate expected to rise to 3.5% in 2016.