March 9, 2017 [OPIS] - Oil demand growth will average 940,000 b/d out to 2022, according to JBC Energy, as the consultancy disputed figures the International Energy Agency (IEA) released this week.
The IEA pegged average oil demand growth at above 1.2 million b/d between 2016-2022 according to Oil 2017, its market analysis and forecast report previously known as the Medium-Term Oil Market Report. That’s more than the average since the turn of the century, according to JBC.
Consistency issues in the IEA report were due to the price assumptions taken from a Brent forward curve of roughly close to $58/bbl for 2017-2022, said Vienna-based JBC Energy. The consultancy said a price below $60/bbl is unlikely to present a balance in the IEA’s modelling, and could result in assessments of too strong demand and too weak supply, leading to falling OPEC spare capacity.
“U.S. supply (excluding biofuels and processing gains) is seen growing by 1.6 million b/d, while we have 2.4 million b/d, forecasting Brent prices at $70 per barrel in 2022,” JBC Energy said in its Market Report dated March 7. “This is crucial, because we have clear evidence that every dollar makes a difference for the suppliers, especially U.S. shale producers.”
The IEA’s crude distillation unit capacity addition forecasts were estimated at around 7 million b/d, some 3 million b/d above JBC Energy’s latest projections for the 2016-2022 period, the consultancy said Tuesday.
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