India takes centre stage in energy economy, to drive demand growth: IEA

Andrew Cummings
November 14, 2017

Meanwhile events in Saudi Arabia, OPEC's kingpin, "have added extra momentum to the rally that has driven oil prices from lows of $45/bbl (Brent) in late June to around $63/bbl recently", the IEA said.

The largest contribution to demand growth - nearly 30 per cent - would come from India, whose share of global energy would rise to 11 per cent by 2040, it said. This latest move comes as investors expect figures to show USA oil production has risen.

The dramatic shifts envisioned by the IEA in its World Energy Outlook would transform the US from an energy importer into a major player in global markets capable of producing 30 million barrels of oil and gas a day by 2025.

The benchmark report notes that with renewable energy technologies nipping at the heels of oil, natural gas and coal and a global push by policymakers to cut carbon emissions, juxtaposed with near-insatiable demand from a global population that will hit 9 billion within a few decades and the rise of the US as the world's largest oil and gas producer, the energy sector is experiencing disruptive times.

Oil producers who signed up to a landmark production cut agreement mostly stuck to the deal, with the compliance rate at 96 percent in October, and 87 percent for the year to date, the IEA also said. OPEC says that "The global economic growth dynamic has continued its broad-based and relatively strong momentum", OPEC said.

Two government initiatives to reduce greenhouse gas emissions, namely the carbon tax and the GHG emission limits, also "have implications for oil sands", the IEA warns.

But the price crash had another effect: it forced a wave of innovation that has improved shale producers' productivity and efficiency.

The IEA said planned and unplanned disruptions from OPEC may be offset elsewhere, however.

Another milestone will be reached soon after: By the late 2020s, the US - which only lifted its ban on oil exports in 2015 - will ship more oil to foreign markets than it imports. However, this is expected to cut only 2.5 million barrels per day (bpd), or about two per cent, off global oil demand by that time.

Worldwide, oil consumption is seen reaching 97.7 million bpd in 2017, up 1.5 million bpd from 2016.

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

"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said.

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