OPEC says it will take five years for oil demand to recover to pre-recession levels.

Posted Jul 8th 2009 3:50PM by Connie Madon
Filed under: International Markets, Forecasts, Economic Data, Commodities, Oil, Recession

What is the current supply/demand for oil going forward? OPEC is saying that it will take five years to bring demand back to pre-recession levels.

In 2008 average consumption of OPEC oil reached 31 million barrels per day. We will not reach that mark until 2013. Demand for non OPEC oil is expected to remain flat at about 45 million barrels per day.

So now with less demand, there is less desire to invest in new capacity. OPEC had previously planned to spend $165 billion dollars in new capacity. Now they have scaled back these numbers to $110 to $120 billion into the year 2013.

In Rome last May, the International Energy Agency feared that lower investments in capacity would lead to severe future shortages.

The OPEC report further stated that it expects global demand to fall to about 85 million barrels per day. Going forward, they are looking for demand to grow to 87.9 million barrels per day in 2013, down by 5.7 million barrels per day than previously expected.

Oil has dropped from a peak of $73.00 per barrel about a week ago to about $62.00 per barrel yesterday.

All of this is bringing reality in line with expectation. There were great hopes of a quick recovery but now with unemployment still rising we see no quick return to economic stabilization

What a reasonable price for oil in this economic environment?

Tags: inthenews, oil demand, OilDemand, opec

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Reader Comments (Page 1 of 1)

7-09-2009 @ 5:25PM

dang1067 said...

What a STUPID Prediction of 2014...

1- 2010, 50% of all roads will be filled with Hybrid vehicles. Further plunging oil and energy demand by 30%;

2- 2012, another 50% of all roads will be filled with 100% Electric vehicles, 45% of U.S. homes owners will convert their homes with solar, and wind power, and ethanol production increases to 50% capacity further plunging oil demand by 45%;

3- 2014, All roads are filled with both Hybrids and 100% electric vehicles, and 80% of all U.S. home owners would have installed and converted their homes with Solar and Wind power; and Ethanol production capacities finally reaches competing with oil... Oil demand will wiped out from the robbing criminal's of Wall Street dictionary!

7-08-2009 @ 5:22PM

al cohoic said...

If only what you said could come true. But sadly it can only happen in fairyland, which is located close to Al Gore's house.

Hybrid cars are merely a stopgap measure. They merely transfer the demand for oil from gasoline to the grid where utilities will have to burn more coal( yes utilities burn zillions of tons of coal...for example Duke Energy burns coal for 50% of it's power generation)and natural gas so we can pretend that there is a free luch for energy.

Solar and wind power are realistically 10-20 years away from mainstream power generation.

Ethanol is a waste of good food. Maybe if the algae thing works out we can maybe supply 5-10% of our fuel needs with it.

If you want serious energy independence there is only one safe, proven way to do it......Nuclear. France is reaping the rewards of this now as 80% of their power is generated by nuclear plants. 80%! Sacre Bleau!