World Demand for Oil Seen to Peak Before 2020: Report


Triggered by a number of regulatory policies promoting energy efficiency, coupled with new technology, biofuel use and increasing concern for climate change, the world's demand for oil may peak before 2020, new research suggests.

Ricardo Strategic Consulting predicts the world will scramble to purchase and stock crude oil some nine years from now at no more than 4 per cent above 2010 levels. But demand will gradually ebb so that by 2035, global demand will be less than 2010's  data. 

The Ricardo projection placed oil demand at 3 per cent below 2010 levels in 2035. Accelerated increases in the use of first-generation biofuels could lower oil demand in 2035 to 10 per cent below 2010 levels, the study said.

"Production of first-generation biofuels may increase by 5-6 times over today's levels without allowing for any additional contribution from advanced biofuels, whose prospects remain uncertain."

''The world is nearing a paradigm shift in oil demand,'' said Peter Hughes, managing director of the energy practice of Ricardo Strategic Consulting.

''The drivers working against oil demand growth are increasing in number and intensity, with the consuming nations increasingly focused on reducing their dependency, supported by an ever-stronger legislative framework.''

Earlier, the International Energy Agency projected average 2010 oil demand at 88.2 million b/d. the IEA and most other market observers see oil demand growth to extend well beyond 2020. 

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Commodities

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