The IEA looks for $ 90 crude oil ahead of the downfall of the oil

Global oil demand will plateau around 2030, according to a new report, but the decline in demand is far too slow to offset the worsening effects of climate change.

Oil demand begins to level off in the 2030s under pressure from increasing fuel efficiency and electrification of mobility, "said the International Energy Agency (IEA) in its long-awaited annual World Energy View.

However, the agency does not see a peak in CO2 emissions through 2040, even in a scenario containing some intended policy goals, the IEA states that an expanding economy and growing global population outweigh efforts to reduce emissions. Reducing emissions will require "significantly more ambitious policies."

the rising trend for CO2 and the countries' commitment to reach an early peak of emissions were particularly striking in light of the latest scientific findings from the Government Panel on Climate Change, "said the IEA, citing the rather costly conclusions of the 201[ads1]8 IPCC report, which found that the world is about to make a deep and far-reaching cut in emissions.

As Reuters reports, some groups criticize the IEA for consistently predicting strong oil demand growth. “The IEA is effectively creating its own reality. They are projecting ever-increasing demand for fossil fuels, which in turn justifies greater investment in supply, making it more difficult for the energy system to change, ”Andrew Logan, senior director of oil and gas at Ceres, told Reuters.

With that said, renewable energy is growing rapidly and taking a growing share of all new investment. The IEA sees solar energy as the largest source of installed power capacity by 2040, surpassing coal in the 2030s. Related: A Bull's Guide to Oil Markets

But impressive renewable energy growth and lost climate goals are two things that can be true at the same time. The clock is ticking and the world needs sun and wind to grow at a much faster rate.

The IEA noted that the world supplies around 100 GW of sun each year, enough sun to cover 200,000 football fields. However, it will take 200 years at that pace to meet global energy needs at 2018 levels. Worse, demand is not stagnant, but increasing. With 100 GW of new solar every year, solar would only satisfy 20 percent of annual power demand growth going forward.

In other words, while it is growing rapidly, solar is just "dampening" growth in consumption from other sources. [19659002AlternativtiIEAsscenarioforbærekraftigutviklingsomforutsetterdypeutslippsreduksjonerforåoppfylleklimamåltrengersolenergienåvoksemermedenhastighetpå300GWperårUnødvendigåsiatdetkommertilåkrevenoenstorepolitiskeendringer

When it comes to oil, see IEA demand grow at a rate of 1 million barrels per day (mb / d) through 2025 before flattening out by 2030 due to the depletion of existing sources of supply, see IEA that prices rise to around $ 90 per barrel by 2030, despite a steadily falling demand.

The United States accounts for 85 percent of the total global oil supply increase over the next decade, growing from 6 mb / d in 2018 to 11 mb / d in 2030. The agency sees the current decline in shale production as temporary.

years – nearly $ 900 billion upstream, and the rest on new pipelines and other infrastructure, including LNG export terminals, ”the IEA wrote. "This has not been a profitable business for many of the companies involved at this time. As of 2018, the upstream slate industry as a whole has not yet achieved positive free cash flow." Related: Aramco's Breakeven Costs Are The Lowest In The World

It is a remarkable conclusion since the IEA has repeatedly predicted the impending profitability of slate in recent years, even though the agency is not alone to do it wrong.

Yet, while American slate has burned through cash, it has actually produced a lot of oil. Slate production is now declining as investors lose interest, but the IEA says "the slate has not yet run; many of the most profound effects of the slate revolution lie ahead." The IEA sees slate continue to grow in the years to come, though a few analysts point questions about that optimism.

In general, however, it is the climate divisions that are receiving the most attention. On the basis of IPCC warnings, there is a bleak outlook. In the absence of this, the chances of achieving climate targets will be very narrow, "said IEA's Fatih Birol." The world needs urgently to place a laser-like focus on reducing global emissions. "

By Nick Cunningham of Oilprice .com

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