OPEC Oil & Energy Market Outlook - ief.org · OPEC Oil & Energy Market ... © 2019 Organization of...

OPEC Oil & Energy Market Outlook

Prepared by the

OPEC Secretariat

9th IEA-IEF-OPEC Symposium on Energy OutlookWednesday, 27 February 2019IEF Headquarters, Riyadh, Saudi Arabia

© 2019 Organization of the Petroleum Exporting Countries

Outline

2

● Short-term Market Outlook– Review of the oil market in 2018 – Projections for the oil market in 2019– Supply/demand balances in the short-term

● Medium- and Long-term Market Outlook– Key assumptions– Energy outlook– Oil outlook– WOO 2018 key messages - short video


World real GDP growth remains above trend, yet easing

3

0.7

1.8

-20

-15

-10

-5

0

5

10

15

Jan

14

May

14

Sep

14

Jan

15

May

15

Sep

15

Jan

16

May

16

Sep

16

Jan

17

May

17

Sep

17

Jan

18

May

18

Sep

18

Global trade volume Global trade value

% change y-o-y

Sources: Netherlands Bureau for Economic Policy Analysis and Haver Analytics.

Nov 18

GDP growth by region Global trade volume and value

Unit: % 2017 2018 2019Average2014-18

OECD 2.5 2.3 1.9 2.3

- US 2.2 2.9 2.5 2.4- Euro-zone 2.5 1.8 1.3 1.9- Japan 1.9 0.8 1.0 1.0

DCs 3.6 3.9 3.8 3.6

OPEC 0.5 1.1 0.7 1.5

Brazil 1.0 1.1 1.8 -0.9Russia 1.5 1.6 1.6 0.2India 6.3 7.5 7.2 7.3China 6.9 6.6 6.1 6.9World 3.7 3.6 3.3 3.4


World oil demand growth in 2018-2019y-o-y change, mb/d

4

1.47

1.24

-0.50

0.00

0.50

1.00

1.50

2.00

2.50

2013 2014 2015 2016 2017 2018 2019*

US Europe China India Others Total World

Note: * 2019 = Forecast.

Source: OPEC Secretariat.

0.70

0.40 0.37 0.31 0.30

0.12

-0.07

0.08

-0.01

0.01

0.40

0.44 0.35

0.330.30

0.35

0.240.12

0.094 0.20

1.58

1.010.92

0.730.81

-0.2

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

1Q18 2Q18 3Q18 4Q18 Jan-19

US Europe China India

2018-2019 oil demand growth for

selected countries,

y-o-y change

Note: * Jan 19 preliminary/estimated.


Oil demand growth remains healthy in 2018-2019,while non-OPEC supply recovers during the same period

5Sources: Rystad Energy, US EIA and OPEC Secretariat.

2.722.18

-1.5-1.0-0.50.00.51.01.52.02.53.0

2013 2014 2015 2016 2017 2018 2019*

US Canada Other non-OPEC Total

Non-OPEC supply growthY-o-y change, mb/d

US liquids production forecasts 2018-2019, mb/d


Change Change2018 2018/17 2019* 2019/18

Tight crude 6.27 1.56 7.44 1.17

Gulf of Mexico crude 1.74 0.06 1.89 0.15

Conventional crude oil 2.94 -0.02 2.91 -0.03

Unconventional NGLs 3.26 0.49 3.69 0.43

Conventional NGLs 1.10 0.09 1.15 0.05

Biofuels + Other liquids 1.33 0.06 1.36 0.03

US total supply 16.64 2.24 18.44 1.80



Overall conformity, performance and gains:January 2017 – January 2018

6

Conformity under the Declaration of Cooperation

Sources: Euroilstock, IEA, METI, US EIA and OPEC Secretariat.

87%

152%

82%

0%

20%

40%

60%

80%

100%

120%

140%

160%

Jan-

17

Feb-

17

Mar

-17

Apr

-17

May

-17

Jun-

17

Jul-1

7

Aug

-17

Sep-

17

Oct

-17

Nov

-17

Dec

-17

Jan-

18

Feb-

18

Mar

-18

Apr

-18

May

-18

Jun-

18

Jul-1

8

Aug

-18

Sep-

18

Oct

-18

Nov

-18

Dec

-18

Jan-

19

Average 115%


403

15

-100

0

100

200

300

400

500

Oct

14

Dec

14

Feb

15

Ap

r 15

Ju

n 1

5

Au

g 1

5

Oct

15

Dec

15

Feb

16

Ap

r 16

Ju

n 1

6

Au

g 1

6

Oct

16

Dec

16

Feb

17

Ap

r 17

Ju

n 1

7

Au

g 1

7

Oct

17

Dec

17

Feb

18

Ap

r 18

Ju

n 1

8

Au

g 1

8

Oct

18

Dec

18

Crude Products Total

OECD commercial oil stocks (deviation from 5-year average, mb)

Jul 16

OECD commercial oil stocks on the rise again

7

7.4

-1.0

-4.0

-2.0

0.0

2.0

4.0

6.0

8.0

52

54

56

58

60

62

64

66

68

Oct-

14

Ja

n-1

5

Ap

r-15

Ju

l-15

Oct-

15

Ja

n-1

6

Ap

r-16

Ju

l-16

Oct-

16

Ja

n-1

7

Ap

r-17

Ju

l-17

Oct-

17

Ja

n-1

8

Ap

r-18

Ju

l-18

Oct-

18

Ja

n-1

9

Absolute(LHS) Difference to 5-year average(RHS)

OECD commercial oil stocks

Day of forward cover


Outline

8

●––

● Medium- and Long-term Market Outlook– Key assumptions– Energy outlook– Oil outlook– WOO 2018 key messages - short video


Key assumptions

● Global population is expected to increase from around 7.6 billion in 2017 to 9.2 billion in 2040.● Global GDP growth to average 3.4% p.a. between 2017 and 2040.● Reference Case reflects evolutionary development in technology and policies.

Population by region, 2015–2040 Distribution of the global economy, 2017 and 2040

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

0

1

2

3

4

5

6

7

8

9

10

2015 2020 2025 2030 2035 2040

%billionNon-OECDOECD

© 2019 Organization of the Petroleum Exporting Countries 10

In absolute terms, natural gas expands the most in the long-term, followed by ‘other renewables’

Energy demand and shares by fuel Growth in primary energy demand by fuel type2015–2040

● Energy demand will increase by 91 mboe/d, or 33%, to reach the level of 365 mboe/d by 2040.● Natural gas and ‘other renewables’ show the largest growth in the long-term.● Oil retains the highest share in the global energy mix throughout the forecast period.

32% 28%

28%22%

22%25%5%

6%

2%

3%

10%

10%

1%

6%

0

50

100

150

200

250

300

350

400

2015 2040

mboe/dOtherrenewablesBiomass

Hydro

Nuclear

Gas

Coal

Oil


Overall energy demand increases along with changes in regional distribution

Energy demand by region

● Energy demand in China and India will grow by more than 20 mboe/d each.● The share of Developing countries in total demand increases by 10 percentage points.

40% 30%

52%

63%

8%

7%

0

50

100

150

200

250

300

350

400

2015 2040

mboe/d

Eurasia

Developingcountries

OECD

Growth in primary energy demand by region2015–2040


● Oil demand in Developing countries to increase by more than 22 mb/d between 2017 and 2040.● Road transportation remains the largest oil demand sector, but petrochemicals see the largest

increase.

Long-term oil demand projected to increase by 14.5 mb/d to reach 111.7 mb/d in 2040

Sectoral oil demand growth in 2017 and 2040

Regional oil demand growth in 2017 and 2040


Interplay of multiple factors shapes oil demand growth in the road transportation sectorGlobal road vehicle fleet composition

2017–2040

Aviation

Road

Petrochemicals

Other industryResid/Comm/Agr

Electricity -1.1

Demand in road transportation in 2017 and 2040OECD Developing countries


Road transportation oil demand is sensitive to the expansion of electric vehicles

Electric vehicle penetration in the car fleet in the different sensitivities

Oil demand in the passenger car segment in the different sensitivities

● Demand implication is fairly limited over the next ten years, within the range of 1 mb/d, but start widening during the last decade of the forecast period

● The range of uncertainty is more than 4 mb/d by 2040


0

10

20

30

40

50

60

70

80

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

2037

2038

2039

2040

OECD Americas OECD Europe OECD Asia-PacificAsia Far East Latin America Middle EastAfrica Eurasia China

Non-OPEC supply peaks in late 2020s when US tight oil plateaus

Long-term non-OPEC supply growth by regionmb/d

● Demand for OPEC crude only exceeds current levels after US tight oil peaks in the late 2020s. Thereafter, however, it grows continuously and reaches almost 40 mb/d by 2040.

US oil supply


● Sensitivities show a range of +/- 1-2 mb/d relative to the Reference Case peak, and +/- 3-4 mb/d by 2040.

● Any such outcome would have a meaningful impact on non-OPEC supply and oil markets in general.

US tight oil: sensitivities illustrate uncertainty and a wide range of possible outcomes

US tight oil production - sensitivitiesmb/d

Source: OPEC

6

7

8

9

10

11

12

13

14

15

16

17

2016 2018 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040

Reference Case Case 1 - 'lower productivity' Case 2 - 'technology breakthrough'


● Long-term distillation capacity additions projected at 17.8 mb/d.● Global crude oil exports increase over the long-term, with the Middle East remaining dominant.

Substantial expansion of the downstream sector required

Global capacity requirements by process type2018 – 2040

0

5

10

15

20

25

30

Crude distillation Conversion Octane units Desulphurization

mb/d

Additional requirements to 2040

Additional requirements to 2030

Projects to 2023

0

10

20

30

40

50

2017 2020 2025 2030 2035 2040

mb/d

US & Canada Latin America AfricaEurope Russia & Caspian Middle EastAsia-Pacific

Global crude oil exports by origin*2017–2040


● The majority of investments will be in the upstream, much of which in North America.

Oil sector requires investment of $11 tn by 2040

Cumulative oil-related investment requirements by sector, 2018-2040

www.opec.org

Thank you

19

Download the new iOS/ Android app or access a comprehensive interactive version

of the WOO at www.opec.org

9th IEA-IEF-OPEC Symposium on Energy OutlookWednesday, 27 February 2019IEF Headquarters, Riyadh, Saudi Arabia

OPEC Oil & Energy Market Outlook - ief.org · OPEC Oil & Energy Market ... © 2019 Organization of...

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