BAKU, Azerbaijan, Nov.5
By Leman Zeynalova – Trend:
Global oil demand is expected to continue growing at relatively healthy rates in the medium-term reaching 104.8 million barrels a day (mb/d) by 2024, Trend reports citing OPEC’s World Oil Outlook.
“This represents an increase of 6.1 mb/d above the 2018 level. The average growth will be about 1 mb/d over the medium-term period, declining from a projected 1.1 mb/d in 2019 to 0.9 mb/d in 2024. Incremental demand is forecast to come primarily from non-OECD (Organization for Economic Co-operation and Development) countries (+6.6 mb/d). Annual average oil demand growth from non-OECD countries is projected to remain within a relatively narrow range of 1–1.2 mb/d over this period. Oil demand in the OECD is projected to gradually shift from slight growth during the initial years of the medium-term to declining demand after 2020, partially offsetting growth in the non-OECD region,” said the cartel,
This is while long-term global oil demand is expected to increase by about 12 mb/d, rising from 98.7 mb/d in 2018 to 110.6 mb/d in 2040.
“From a regional perspective, there is a contrast between declining OECD demand and expanding demand in the non-OECD. Driven by an expanding middle class, high population growth rates and stronger economic growth potential, non-OECD oil demand is expected to increase by 21.4 mb/d between 2018 and 2040. India is projected to be the country with the fastest oil demand growth and the largest additional demand. OECD demand is expected to plateau at around 48 mb/d for the next few years, before declining to around 38 mb/d by 2040. At the global level, growth is forecast to slow from a level of 1.4 mb/d in 2018 to around 0.5 mb/d towards the end of the next decade,” said OPEC.
As for the new regulations of the International Maritime Organization, the cartel believes that the regulation limiting sulphur content in marine fuels (0.5 percent maximum on a weight basis), effective from 1 January 2020, is expected to be a disruptive event, not only for the shipping sector, but also for the global refining system and related refined product supply.
However, evolving market conditions and projections in terms of oil demand, liquids supply and oil refining, as well as developments within the shipping industry, have led to slight adjustments to previous IMO-related projections, the report reads.
“Recent assessments indicate that the global refining system will have sufficient flexibility to address the changes in the maritime sector’s fuel mix. Nevertheless, the impact on high sulphur fuel oil (HSFO) prices, the gasoil/HSFO spread, as well as HSFO-rich crude oil prices, will still be significant, although less severe than previously expected.”
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