In the previous article, I discussed the recent release of the International Energy Agency’s (IEA) 2016 World Energy Outlook(WEO). The annual WEO report projects future energy consumption, production, and pricing trends based on different future scenarios. Today I will highlight the IEA’s outlook for the oil markets.
This year’s report considered three general scenarios, described in greater detail in the previous article. The Current Policies Scenario (CPS) depicts a path for the global energy system based on policies or measures in place as of mid-2016. The New Policies Scenario (NPS) assumes that government pledges such as those made in response to the Paris Agreement on climate change will be reflected in legislation.
The report also looked at the changes that would be required in the energy sector to limit the concentration of greenhouse gases in the atmosphere to around 450 parts per million (ppm)– the maximum estimated level that can be allowed to keep the global temperature rise to less than 2°C.Click here to read more.
The baseline 2015 oil demand used in the report was 92.5 million barrels per day (bpd). Demand for oil is forecast to increase under both the CPS and NPS, which is consistent with my own expectations. The past 30 years have seen global crude oil demand grow fairly steadily by a total of about 35 million bpd.
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