Global oil supply and demand pairs of “rigid” will lead to spiraling oil prices, energy, speed up the transformation
Here at the third exchange of oil market research conference, Economic and Technical Research Institute of China National Petroleum Group, JIANG Xue-feng, deputy chief engineer of expected future supply and demand in the international oil market will present two “rigid” in the new pattern will push oil prices spiral; after the outbreak of financial crisis, coupled with policies to promote the acceleration of the global emission reduction and unconventional resources, and renewable energy development will accelerate, thus contributing to accelerate the transformation of the world’s energy, resulting in global oil demand to peak before supply.
JIANG Xue-feng, according to analysis of the pattern of future world oil supply and demand significant changes will occur: one is oil demand growth will come mainly from non-OECD (OECD) countries, while emerging market economies are in rapid development of industrialization and urbanization period of oil consumption will vary rapid economic development, growth and future global oil demand growth has strong rigidity characteristics; the other hand, oil supplies will become even more dependent on OPEC oil producers, and in the pattern of this new supply, the investment growth and supply capacity growth will be a serious mismatch, the future global oil supplies also show rigidity characteristics.
OECD oil demand is now the country has entered the peak of its oil demand since 2006 occurred for 3 consecutive years of negative growth year on year. Future global oil demand growth will come mainly from non-OECD countries. Non-OECD countries oil consumption in the last century, the rapid growth after 90 years, and by 2030 to sustain strong growth momentum, particularly in emerging market countries and the Middle East.
Because of industrialization and urbanization in the period of rapid development, oil consumption in emerging market economies, rapid growth with economic development; and the main oil-consuming countries are the subsidies for oil consumption growth in the countries, which are made of non-OECD countries oil demand has a strong rigid growth characteristics. In addition, OECD countries to offset decline in oil consumption growth in consumption of non-OECD countries, world oil demand will continue to grow.
The supply side, non-OPEC conventional oil production has already reached its peak. Since the last century, since the mid-90s, non-OPEC nation’s oil reserves, has been in a “deficit” state, annual production of more than exploration for new reserves of more than 4 billion -50 billion barrels. Decay rate in order to reserve judgment, non-OPEC oil production is undergoing a period of decline or a peak. IEA (International Energy Agency) forecasts, non-OPEC conventional oil production from 2008 to 39.3 million bbl / d in 2030 fell down 35.3 million bbl / day. PFC Energy consulting firm is expected, non-OPEC oil supply and world oil consumption will continue to expand the difference between the future global oil supply will become more dependent on OPEC oil producers by 2030, OPEC’s share of the oil market from the current 44 % to 52%.
JIANG Xue-feng, compared with more than 10 years ago, the world’s major oil and gas producing countries, the scale of the new reserves are found in significantly decreased, the remaining recoverable reserves are concentrated in the OPEC and Russia – Central Asia, a handful of countries, making the combination of investment and high-quality resources, blocked, and the investment growth and supply capacity growth poles do not match.
This is primarily due to oil companies in these countries bear the responsibility for economic and social transfer payments, often leading to insufficient investment in their own; Second, they need to create a balance between supply and demand tight control over the price of oil is already a favorable context; again, these countries suffer from political instability or external cooperation policy, the impact of foreign capital and tightening of the combination of high-quality resources. Data show that the global top 50 oil companies (currently yield a total of 60 million barrels / day, accounting for 71% of the global total) in the upper reaches of investment from 2000 to about 150 billion U.S. dollars up to the current more than 360 billion U.S. dollars, an average annual increase of 11 %, in 2008 peak of nearly 500 billion U.S. dollars, while oil production over the same period increased by only 1.8%.
JIANG Xue-Feng pointed out that currently, financial speculation and the dollar has become a fundamental factor in the new Guojiyoushi, its impact will be a long-term oil supply and demand of the two “rigid” to provide the conditions for the operation of speculative capital is expected to price the spiral was high volatility in the medium term trend. The spiral of oil prices, the financial crisis, advance a global emission reduction policies, will accelerate the unconventional resources, and renewable energy development process, promoting the world’s energy to accelerate their transformation, resulting in world oil supplies ahead of peak demand.
In his view, the situation in the absence of supply constraints, there are two may be able to make the world oil demand to peak ahead of schedule: First, hybrid and electric vehicles emerged breakthrough technological advances; second large-scale substitution of natural gas for oil.
According to the analysis, if the global average energy efficiency of light vehicles increased by 50% at present, U.S. gasoline demand (accounting for 12% of the world) than has dropped 46%; and natural gas resources are abundant, easy to combine resources and investments, and the development of cheap, right oil price discounts may lead to the demand shift from oil to natural gas.
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