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Crude oil futures edged higher Thursday, finding support in data that indicated the pace of U.S. inflation was slowing, with the May producer price index coming in milder than expected a day after a tame reading for the May consumer price index.
The head of OPEC, Secretary General Haitham Al Ghais, dismissed predictions of peak oil demand Thursday, in a rebuke of an International Energy Agency report that pointed to peak oil consumption by 2029.
OPEC does not see a peak in oil demand in its long-term forecast and expects demand will grow to at least 116M bbl/day by 2045, while the IEA sees oil demand leveling off at 106M bbl/day towards the end of the decade.
Al Ghais said similar gloomy forecasts had proven wrong in the past, noting the IEA had suggested gasoline demand peaked in 2019 and that coal demand peaked in 2014.
IEA forecasts growth will drop “off a cliff to almost no growth” in four years up to 2030, which Al Ghais said is an “unrealistic scenario” and a “dangerous commentary, especially for consumers, and will only lead to energy volatility on a potentially unprecedented scale.”
While “OPEC welcomes all the progress made in renewables and EVs, it is nowhere near close enough to replace 80% of the energy mix,” the Secretary General wrote.
Front-month Nymex crude (CL1:COM) for July delivery closed +0.1% to $78.62/bbl, and front-month August Brent crude (CO1:COM) ended +0.2% to $82.75/bbl.
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In the short term, OPEC maintained its demand growth estimate at 2.2M bbl/day, while the IEA cut its projection to 960K bbl/day from 1.1M bbl/day.
In comments relayed by Dow Jones, analyst Jim Ritterbusch views global oil balances on the bearish side and sees a risk of reduced adherence to OPEC+ output quotas as summer advances, “especially with estimated U.S. production increasing last week for the first time in about three months.”
