OPEC sees oil demand continuing to grow until 2050 – Commerzbank

OPEC released its long-term outlook for the oil market through 2050 this week, notes Carsten Fritsch, commodities analyst at Commerzbank.

The demand forecast will likely turn out to be too high

“It shows that OPEC is confident that oil demand will increase by mid-century. At that time, global consumption is expected to reach 120.1 million barrels per day. At the end of this decade, OPEC expects demand to reach 112.3 million barrels per day.”

“OPEC’s forecast is thus more than 6 million bpd higher than the IEA’s, which expects demand to start declining after 2029. OPEC assumes that e-mobility will advance at a much slower pace than the IEA. The total number of vehicles is expected to increase from 1.2 billion in 2023 to 2.9 billion in 2050.”

“Of these, 70% are still expected to have an internal combustion engine. OPEC sees obstacles for EVs in power grids, battery manufacturing capabilities and access to critical minerals. Thus, OPEC’s demand forecast depends on its assumption for electric vehicle sales. If they rise faster than OPEC assumes, the demand forecast will likely turn out to be too high.”