The foundations laid in 2016 seem to bolster oil prices but the effects of this growth could betray expectations. Despite the fact that the cuts in production agreed upon in Vienna are bolstering oil prices, OPEC predicts that global demand is expected to increase by almost 17 mbbl/d up until 2040 - when it might reach about 110 mbbl/d. Among the emerging countries, the Asian ones should absorb about 70% of this increase, spurred on by population growth, a rapidly expanding middle class, urbanization and industrialization.
OPEC secretary general Mohammed Barkindo, at the end of the Petrotech Conference on Energy in India, said that "Asia will play an important role in the stability of the oil market and this creates new opportunities for all producers, both OPEC and non-OPEC." This is confirmed by predictions according to which by 2040 the demand for oil in India will more than double, to 10 mbbl/d. "Its vibrant economy currently enjoys the fastest growth in the world with a rate of 7.5% in 2016" commented Barkindo.
The new year hence will open auspiciously. Already in January OPEC will seek to reduce the excess supply to bolster prices. But to reach the target of 1.2 mbbl/d, the non-OPEC countries will have to contribute to the cut with a reduction of 600,000 barrels. Russia has already come forward by agreeing to cut its oil production by 300,000 bbl/d starting next March.
On the other side of the world, the same predictions are pushing the newly elected US President, Donald Trump, to review US energy policy in order to favour oil and natural gas producers. It is likely he will give the go-ahead for the pipeline in Dakota.