Last updated: 8 November, 2011

OPEC raises output forecast but wary on investment

OPEC raised its medium- and long-term forecasts for oil output on Tuesday but warned that uncertainty over energy and environmental policy was confusing the picture and could affect investment.

By 2015, global oil demand was expected to reach 92.9 million barrels per day (mbdp), up from the 91 mbpd given in last year’s World Oil Outlook report.

In the longer-term, the Organisation of Petroleum Exporting Countries forecast demand at 109.7 million bpd in 2035, up 23 mbpd from 2010.

Last year’s long-term prediction extended as far as 2030.

The world economy recovered faster than predicted in last year’s report, thanks to stimulus packages and the contribution of developing countries.

However, the pace of recovery was slowing again with potentially major repercussions on oil demand, OPEC warned.

As states develop strategies to combat climate change and push for renewable energy, the picture was also becoming increasingly unpredictable and this could deter investors, said the cartel, which pumps some 40 percent of the world’s oil.

“The energy and environmental policies of consuming countries … offer a hazy picture of their impact on future oil consumption, supply levels and overall energy demand,” OPEC secretary-general Abdullah El-Badri said in the report.

“Confidence is key … It would be a damaging waste of resources to invest in capacity that is not needed,” he added.

By 2035, global oil demand growth will be driven almost entirely by countries outside the OECD group of developed countries, the report noted.

Unrest in the Middle East and northern Africa, Japan’s nuclear disaster and global economic troubles meanwhile created challenges this year but the oil markets adjusted accordingly.

“Once again, this demonstrates the resilience of oil markets and the fact that oil is a reliable source of energy for meeting the world’s energy needs,” El-Badri said.

OPEC oil supply was expected to rise by 34 percent over the next 25 years, to 39.3 mbpd in 2035 from 29.3 mbpd in 2010, the report said, but OPEC’s share of total world production will remain roughly unchanged.