OPEC Chief Says No Demand Peak in Sight for Crude as U.S. Approaches All-Time High Output

Norway also says crude will dominate the energy market for "decades" to come. File Image / Pixabay

Although the Organization of the Petroleum Exporting Countries (OPEC) has repeatedly forecast that alternative energy will one day replace crude - something electric car and other green advocates insist will come sooner than later - the cartel's secretary general now says there is "no peak" for oil demand for "the considerable future."

Speaking at the Oil & Money conference in London, Mohammad Barkindo on Thursday delivered his familiar message that markets are rebalancing, but within that context he noted that "We expect global oil demand to surpass 100 million barrels per day [bpd] by 2020."

This figure is far above OPEC's forecast for this year of 96.8 million bpd, and the rate of strengthening demand is such that the secretary general sees no limit to demand growth for the foreseeable future.

The recent hoopla over the potential rise of alternative energy not withstanding, other experts seem to agree with Barkindo's analysis: Terje Soviknes, energy minister for Norway, told Bloomberg that despite the renewables revolution, it still makes financial sense to explore for more oil.

He said, "I'm not that concerned with when exactly we get peak demand, whether that's in 2030, '35, '40 - or earlier for that matter; what's most important is that there's high demand, and that's going to be there for decades to come.

"We must position the Norwegian shelf for that."

Both Soviknes and Barkindo perceive the most immediate threat to the health of the market to be lack of any significant new discoveries to ensure stable oil supply.

Related news on Thursday suggests that one thing is certain: if stability of supply is a concern, the U.S. is doing its utmost to ensure there is plenty of crude for everyone.

CNBC reported that for two separate weeks recently, the U.S. "exported as much oil onto the world market each day as was being pumped in either Nigeria or Venezuela and by several other OPEC countries together" - about 1.9 million bpd, and a sure sign for the news agency of  "an even bigger U.S. presence on the world market and an increasing role for U.S. shale as a lever on world oil prices."

Plus, analysts think production will soon surpass the all time high of the 1970s of 10 million bpd: Edward Morse, head of  global commodities research for Citigroup, said North America is clearly edging toward energy independence, when counting U.S. production along with Canadian oil output.

Daniel Yergin, vice chairman of IHS Markit, added, "The thinking is really struggling to catch up to the new reality of America's transformed energy position."

These sentiments seem to lend credence to comments made earlier this week by Bob Dudley, CEO of BP, who did not receive much agreement from colleagues when he stated that the global market is rapidly tightening, with crude and products "just heading down."