Oil demand will soon reflect the “attractiveness” of the current level of crude prices, and Asia will be a vital engine of economic expansion for decades, Saudi Oil Minister Ali al-Naimi said. OPEC’s chief joined him in seeing Asia as the main hub for growth.
Oil demand in Asia will rise by about 16 million barrels a day to almost 46 million by 2040, Abdalla Salem El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, said in an article posted on the International Energy Forum’s website. The region will need to import 40 million barrels a day of crude oil and refined products by then, he said.
Many Asian countries welcome the recent decline in oil, and demand “will soon reflect the attractiveness of the current prices,” al-Naimi said in an a separate article posted on the IEF’s website. “That said, it is not high prices or low prices that we want –- and by ‘we’ I mean producers and consumers -– it’s stability of prices.” al-Naimi said. The Riyadh-based IEF’s members, including the U.S. and China, account for more than 90 percent of global supply and consumption of oil and gas.
Sales Contest
Saudi Arabia and other members of OPEC face greater competition for crude sales in Asia as Russia and producers in Latin America and Africa send more cargoes to the region. Crude has slumped more than 40 percent in the past year amid speculation that oversupply will persist as OPEC continues to pump above its collective target in an effort to force high-cost producers, including some U.S. shale companies, to curb output. OPEC supplies about 40 percent of the world’s oil, and Saudi Arabia is its biggest producer.
Brent crude, a global pricing benchmark, fell 1.2 percent on Friday to $47.42 a barrel on the London-based ICE Futures Europe exchange. Prices slid 3.4 percent last week.
“The global economy has been buffeted over the past few years and major adjustments are taking place,” said al-Naimi, who sees further growth ahead. “Urbanization continues, populations are expanding, prosperity is increasing, as is social mobility,” he said. “All of this requires energy to power it and, in my view, this equates to oil demand growth. Key to this is the role of Asia.”
‘Vital’ Role
The region is “a vital engine of growth for the world economy and I have no doubt it will continue in this role throughout this century,” al-Naimi said. “Asia will -– and should -– assume a greater influence in global energy affairs.”
El-Badri, the OPEC chief, said Asian oil use has increased by more than 40 percent to 30 million barrels a day since 2000, while consumption in Europe and the Americas fell over the same period. “Asia will remain the main hub for oil demand growth,” he said. “Putting this into some perspective, the demand increase in Asia by 2040 is projected to be more than double the increase in all other growing regions combined.”
Russia sees the Asia-Pacific region driving energy consumption in the “medium term,” even with China’s economy growing more slowly, Russian Energy Minister Alexander Novak said in an article on the IEF’s website. His country plans to more than double oil exports to Asia-Pacific buyers by 2035, Novak said, without specifying volumes.
Russia is also seeking to boost natural gas exports to Asia, targeting shipments of 128 billion cubic meters by 2035 from 14 billion cubic meters in 2014, he said. Russia’s Eastern Gas Program calls for four large gas production centers and construction of pipelines toward China, according to Novak.
shortonoil on Sun, 8th Nov 2015 11:26 am
Apparently these guys don’t read the news very often?
http://www.zerohedge.com/news/2015-11-08/global-trade-demand-continues-dry-chinas-exports-miss-fourth-straight-month
Plantagenet on Sun, 8th Nov 2015 1:56 pm
Its hard to see where the additional 14 million bbls/day for Asia will come from, especially when you consider that all the giant oil fields currently under production are depleting and will soon reach their peak and begin production declines.
Newfie on Sun, 8th Nov 2015 5:58 pm
Asia will be the first region to become uninhabitable later this century after CO2 driven climate change raises temperatures beyond the level warm blooded organisms can cope with. Drill Baby Drill and Burn Baby Burn.
makati1 on Mon, 9th Nov 2015 6:37 am
Newfie, look at the latitude of America. Why do you think the Us will not be in the same boat? Beijing is roughly at the same latitude as San Francisco or DC. Mumbai (Bombay) is the same as Central American jungles. And California isn’t looking to good these days. All of the South West US is in trouble, and it will spread East as the drought persists and the climates change. The Midwest could be a desert by 2050. After all, the Sahara Desert was once tropical jungle, until the climate changed.
shortonoil on Mon, 9th Nov 2015 10:39 am
“The Midwest could be a desert by 2050. After all, the Sahara Desert was once tropical jungle, until the climate changed.”
When the Spanish arrived in California in the late 1500s they called it the Great California Desert. It had been a desert for the previous 2,000 years. The climate did change after 1900; it got wetter. It is now changing back to what it always was: a desert. As rain ceases to cross the Rockies, the Midwest will get drier, just like it was before. The last century was the climatic anomaly; not what is occurring presently.
apneaman on Mon, 9th Nov 2015 11:52 am
What is happening now in California cannot be classified as a genuine climatic anomaly, because we are the main cause. What regional natural variation that is taking place means nothing in the face of 400 ppm CO2, 460 – 480 ppm CO2E and hot oceans. No precipitation because of The Ridiculously Resilient Ridge.
The Europeans also called the great plains a desert because it did not have trees, but it was, in fact one of the most productive ecosystems ever. Upwards of 60 million Buffalo and thousands of other species did just fine and so did many farmers up until the dust bowl. All that productive soil is now at the bottom of the ocean.
Causes of California drought linked to climate change, Stanford scientists say
The extreme atmospheric conditions associated with California’s crippling drought are far more likely to occur under today’s global warming conditions than in the climate that existed before humans emitted large amounts of greenhouse gases.
http://news.stanford.edu/news/2014/september/drought-climate-change-092914.html