The IEA presented its medium-term outlook this week. As in the previous year, it believes that oil demand will peak at the end of the decade, Commerzbank’s commodity analyst Barbara Lambrecht notes.
US demand is expected to fall less sharply than last year
“Firstly, the advance of electromobility. In 2030, this is expected to replace the daily demand of 5.4 million barrels of oil. Secondly, the decreasing use of oil in power generation. In Saudi Arabia in particular, the increased use of gas and renewable energies is expected to reduce demand. However, demand is still being driven by increased use in the petrochemical industry.”
“Although the IEA points out that global demand growth will be similar to last year, there will be regional shifts: it expects only a slight increase in demand in China, while US demand is expected to fall less sharply than last year thanks to lower prices and a slower advance in electromobility. The most important growth driver, is India: However, with a daily demand of 5.5 million barrels, the world’s third-largest consumer country consumes significantly less than the second-largest consumer, China, with around 16.6 million barrels per day.”
“Provided there is no major turmoil, the market should be well supplied for the time being. According to the IEA, capacities will grow twice as fast as demand until 2030, primarily thanks to the United States and Saudi Arabia. In line with demand growth, capacities are also likely to expand, particularly in the near future, while levelling off towards the end of the decade.”