OPEC Secretary General Says Peak Oil Demand to Happen in 2040

OPEC sees no reason for investors to expect oil to hit peak demand before 2040, the organization’s secretary general said Monday.

Speaking at the Abu Dhabi International Petroleum Exhibition Conference (ADIPEC), General Mohammed Barkindo said that the cartel’s projections did not foresee oil demand cresting over the coming decades.

Instead, he argued, a dramatic increase in global population would likely result in even more people living without access to electricity, cooking gas or heating. “These parameters suggest there will not be peak oil demand before this time (2040),” Barkindo said.

West Texas Intermediate graph

In contrast to OPEC’s projections, Shell CEO Ben van Beurden told CNBC in July that he expected demand for oil to peak by the late 2020s or early 2030s in a best-case scenario.

In offering a faster timeline than other closely followed oil market prognosticators, van Beurden said while it was not the oil major’s base case scenario, policy and technology developments in the industry could result in peak demand in the medium-term.

Meanwhile, OPEC on Monday forecast higher demand for its oil in 2018 and said its production-cutting deal with rival producers was reducing excess oil in storage, pointing to an even tighter global market next year.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza