IEA: Global Crude Demand to Endure Wave of Electric Cars

Adjust Comment Print

"This is the equivalent of adding another China and India to today's global demand", the IEA said in its report.

"It's quite spectacular, because you're going to see the number of cars on the road double from one billion to 2 billion, thanks to electric vehicles and fuel economy standards", said Laura Cozzi, head of the Energy Demand Outlook division.

In what could come as grim news for officials attending global climate talks in Bonn, Germany, the IEA expects oil demand to keep rising until 2040.

"The abundance of shale gas in the United States also affects the pace of shale gas development in Canada". But analysts expect the price to not rise much further in coming months as the United States ramps up production.

While the USA exported 100 billion cubic metres of Canadian gas in 2005, that figure fell by over a fifth in 2016.


Moreover, the revision for 2018, while "not very large" on average for the full year, came mostly on the back of lower-than-expected demand in the fourth quarter, which would come 311,000 bbl/day lower.

With the USA eating into Canada's prospective market share, the IEA believes Canada's liquefied natural gas export will likely not come to fruition until the 2030s - a decade longer than expected - even as LNG will usher in a "new global gas order".

" Electric vehicles are in the fast lane as a result of government support and declining battery costs, but it is far too early to write the obituary of oil, as growth for trucks, aviation, petrochemicals, shipping and aviation keeps pushing demand higher", says Fatih Birol, executive director, IEA.

Overall global energy needs are seen rising more slowly than in the past, but are still projected to expand by 30 per cent between today and 2040.

Canada could still play a role as China's long-held fears for its energy security means it would seek to diversify its sources of supply.


In its drilling productivity report for this month, the U.S. Energy Information Administration said it expected oil production from the seven main inland shale basins to increase about 1.3 percent in December.

After an upbeat performance last week, oil prices edged lower for a second day Tuesday.

The effort, which started in January, is credited with pulling the price of oil back from the sub-$30 per barrel range last year to two-year highs in recent sessions.

Echoing the forecast by IEA, the Organisation of the Petroleum Exporting Countries said after long years of punishingly low oil prices, there is "increasing evidence" that the oil market is moving closer to reaching a healthy balance between supply and demand.


Comments