IEA cuts 2030 oil demand forecast

  • Business
  • Wednesday, 11 Nov 2009

LONDON: The International Energy Agency (IEA) cut its long-term forecast for global oil demand as the economic crisis saps consumption in developed economies and environmental policies encourage alternative energy use.

Global oil demand was expected to advance 1% a year to 105 million barrels a day by 2030 from 85 million barrels a day in 2008, the adviser to 28 nations said yesterday in its annual World Energy Outlook.

The figure is below last year’s 2030 estimate of 106 million barrels a day.

“The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets,” the Paris-based agency said in its executive summary of the report.

“World energy demand in aggregate has already plunged with the economic contraction.”

Governments have urged consumers to reduce energy consumption to lower carbon emissions and cut dependence on imported fuel.

US president Barack Obama last month announced US$3.4bil in grants to boost the efficiency of the country’s power-transmission network.

As demand growth slowed, the world may still face a supply crunch and surging prices as the recession crimps investment in new projects, the agency said.

Climate-change legislation would also slow long-term crude oil demand, the IEA said.

The United Nations will host delegates from 192 nations in Copenhagen next month to seek a new treaty on emission reductions for industrialised and developing economies.

Oil traded as low as US$32.40 a barrel last December as a recession in major economies including Germany and the United States eroded demand.

The IEA cut its five-year forecasts for global crude consumption in June, citing the economic slowdown. Demand won’t return to levels seen last year, when prices soared to US$147.27, until 2012, the agency said at the time.

All the growth in oil demand through 2030 will come from developing economies, according to the IEA report. Consumption in the developed countries of the Organisation for Economic Cooperation and Development will shrink during the period.

The IEA also reduced its forecast for global energy demand in 2030 to 16,800 million tonnes of oil equivalent from a previous estimate of 17,010 million tonnes.

The agency sees consumption rising 40% from 2007 to 2030, or 1.5% a year. Last year, it had estimated that demand would rise 45% from 2006 to 2030, or 1.6% a year.

The IEA’s forecasts are based on its “reference scenario” which assumes that governments make no changes to their existing energy policies and measures.

The adviser also has a “450 scenario” whereby world governments take collective action to reduce the concentration of carbon dioxide and other greenhouse gases in the atmosphere to 450 parts per million. — Reuters

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