The oil market will adjust in 2023 with a higher risk of volatility in prices according to the Market Report Oil 2018, prepared by the International Energy Agency and presented by the Spanish Energy Club last week, with the participation of Neil Atkinson, Head of Oil Industry and Markets Division from the Directorate of Energy Markets and Security, and Toril Bosoni, Analyst from Non-OPEC Supply area, both of the IEA.
The report foresees strong growth in global oil market, driven by developing countries in Asia and strong growth in global petrochemical demand. In particular, the AIE predicts that the demand for oil will grow at an average annual rate of 1.2 mb / d (millions of barrels per day), reaching 104.7 mb / d in 2023. From that year, the growth rate will decrease to 1mb / d.
This growth will be marked by the good economic prospects worldwide, estimated by the International Monetary Fund at a 3.9% rate. China and India will jointly contribute almost 50% of the world’s oil demand.
However, a certain deceleration in the growth of oil consumption is expected in China, mainly due to new environmental policies designed to curb air pollution. The strong growth in petrochemical demand worldwide is also one of the main key factors of growth.
The report foresees strong growth in global oil demand driven by developing countries in Asia and strong growth in global petrochemical demand
As for the offer, in the next three years, the United States will meet 80% of this growth in oil market demand, with Canada, Brazil and Norway managing to cover the remaining.
Despite the decrease in production costs, new investments will be needed to meet the demand after 2020. Although in 2017 these investments have increased, they have not recovered from the historical fall suffered in 2015 and 2016. These investments will be even more needed considering the decline of wells being experienced, since the world needs to restore 3 mb / d per year, Enerclub said in a statement.
In the next three years, the United States will meet 80% of this demand growth. In the last three years, oil production in countries such as China, Mexico and Venezuela has fallen as a result of lower investment
In the last three years, oil production in countries such as China, Mexico and Venezuela has fallen as a result of lower investment. Mexico is developing important reform proposals that could lead production to grow again in 2023. However, Venezuela is slowing down OPEC’s total production capacity net growth, which will only reach 750 kb / d. This growth also depends on stability in countries such as Iraq, Libya and Nigeria.