EIA revises long-term oil price forecast up by 35%

20 June 2006 22:28  [Source: ICIS news]

CHICAGO (ICIS news)--The US government's official energy forecaster has revised its annual estimate of long-term oil prices up by 35%, to $57/barrel in 2030, saying it has altered its view of the willingness of oil-producing nations to lift their output to meet expected global demand growth.

Global oil demand is now projected to rise to 98m barrels/day in 2015 from 80m barrels/day in 2003, then rise further to 118m barrels/day in 2030 for an average annual gain of 1.4%, the Energy Information Administration (EIA) said.

But in a low-price scenario of $34/barrel in 2030, demand would increase to 128m barrels/day. In a high-price scenario of $96/barrel, demand would only reach 102m barrels/day in 2030.

The upward revision in the price forecast reflects "a more pessimistic view of the willingness of oil-rich countries to expand production capacity as aggressively as previously envisioned," EIA said.

The annual forecast sees the strongest energy consumption growth in developing countries, especially China and India. Energy use in developing countries in Asia will nearly triple over the projection period, EIA said.  

The US, China, and India will together account for slightly more than half the projected growth in world oil consumption.

Members of the oil producers' organisation Opec are expected to increase their supply of oil by 14.6m barrels/day between 2003 and 2030, while non-Opec production will rise by
23.7m barrels/day. The non-Opec forecast includes 8.1m barrels/day of unconventional production, including oil sands, bitumen, biofuels, coal-to-liquids, and gas-to-liquids sources.

EIA did not make a specific prediction about natural gas prices, which have been a key concern for the chemical industry. But it said natural gas will expand its share of the global energy market to 26% in 2030, from 24% in 2003.

In the US, industrial consumption of natural gas is forecast to grow slowly, reaching 10.0trn cubic feet in 2030, compared with 8.3trn cubic feet in 2003.

By: Stephen Burns
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