Oil demand to peak in 2030

Global oil demand could peak by the end of the next decade even as global economic growth climbs.

The latest downward revision to forecasts, from consulting firm McKinsey, could leave major new investments uneconomic if demand for energy fails to meet expectations.

McKinsey said it has cut its forecast for growth in demand to 0.8pc a year to 2040, “well below mainstream base case perspectives”, including its own estimate of 1.1pc made last year.

Demand for oil is expected to grow even more slowly beyond 2025, with the research pointing to a possible peak of 100m barrels a day by 2030, from current levels of 94m.

Major investments in the energy system may no longer be needed and some could be at risk of being strandedMcKinsey Energy Insights

The industry is mired in debt after the plunge in oil prices in recent years.

McKinsey’s Occo Roelofsen said despite an expected increase in global population of around 36pc, and a doubling in global gross domestic product (GDP), shifting energy sector dynamics are set to depress energy demand.

“ This change is driven by three factors: first, overall GDP growth is structurally lower as the population ages; second, the global economy is shifting away from energy-intense industry towards services; and third, energy efficiency continues to improve significantly,” he said. “Peak oil demand could be reached around 2030. ”

oil wells at Gudong oil field — “Peak oil demand could be reached around 2030. This has major implications for the global energy balance, oil market dynamics and the oil industry,” said McKinsey’s Occo Roelofsen Credit: Wu Hong/EPA

Meanwhile growth in electricity demand will outstrip other sources of energy by more than two to one, due to the steady “electrification” of building and industry in China and India.

Almost 80pc of the capacity needed to meet this increase will be from solar and wind power, McKinsey predicts.

telegraph.co.uk

3 Comments on "Oil demand to peak in 2030"

dave thompson on Mon, 6th Jun 2016 5:54 pm

More BS peak demand nonsense, with no mention of the current state of crude depletion.

rockman on Tue, 7th Jun 2016 11:23 am

And they also still seem a bit conflicted over the demand vs supply relationship. Of course predicting either without including the pricing assumption that prediction MUST BE BASED UPON makes any numbers they present completely meaningless. As we’ve seen the last 10 years the supply/demand dynamic is more dependent upon price then PO.

jjhman on Tue, 7th Jun 2016 11:56 am

I often wonder what the autohr means when I read that the world is shifting to a “service” economy. Am I supposed to believe that people are going to stop eating or wearing clothes or buying televisions? Does anyone suppose that the average Chinese or Indian peasant who moves to the city is doing so because he wants to ride in an Uber car? How do you provide services without things?

Oil demand to peak in 2030

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