Opec today raised its predicted level of oil demand for 2011 from 86.83m barrels per day to 86.95mbpd, or an increase of 120,000 barrels.
This would imply its current forecast is that demand growth will be 1.2mbpd higher than this year.
Interestingly, this comes out a few days after the IEA released its World Energy Outlook, showing its predictions have gone in the opposite direction. According to calculations by JCB Energy Markets, the IEA has “slashed 7.5mbpd out of its 2030 world oil demand forecast”.
JCB makes certain adjustments, such as re-including the impact of biofuels, which the IEA does not. But even if we take the IEA’s headline figures, we can see the difference between its predictions and those of Opec.
The agency expects oil demand to rise steadily to 99mbpd by 2035, which would be 15mbpd higher than 2009.
However, if we take the rise that Opec expects next year and assume it continues until 2035 (as we might expect by the IEA’s phrase “continues to grow steadily”), we come to a figure of 116mbpd. If we think the steady growth refers to the percentage rise in demand rather than the actual number of barrels, the figure is even higher – 121mbpd.
JCB is sceptical about the IEA’s outlook:
A cursory reading could lead one to deduct that the last 12 months have miraculously put us more than half way along the path to saving the world… Did we get something wrong about Obama’s success with the green agenda or have China, Iran, Russia and Saudi Arabia conspired on a carbon-free future?
Others will see it as evidence of Opec talking up their own book.
On an interesting side note, before people pile in to accuse Opec of being overly political with such forecasts, here is a very interesting blog post explaining why the IEA suffers from some of the same problems.