Oil prices will rise to $108 a barrel by 2020 as a global economic rebound boosts demand, the U.S. Energy Information Administration said today.
Average prices for crude oil, which rose 17 cents yesterday to settle at $70.21 a barrel on the New York Mercantile Exchange, will keep climbing beyond 2020 to $133 a barrel by 2035, the EIA said in its yearly International Energy Outlook.
Oil prices hit a record of $147.27 in July 2008 before collapsing as the first global recession since World War II cut demand for energy. Today’s report predicts a slower recovery in oil prices than last year’s forecast of $110 a barrel by 2015.
“The global economic recession that began in 2007 and continued into 2009 has had a profound impact on world energy demand in the near term,” the EIA said. “Although the recession appears to have ended, the pace of recovery has been uneven so far.”
While the report predicts an oil price of $133 by 2035, there is a “wide range of possibilities,” Howard Gruenspecht, EIA’s deputy administrator, said at a press conference in Washington. The report includes alternative scenarios that could result in 2035 oil prices as low as $51 a barrel and as high as $210, Gruenspecht said.
World energy demand is expected to grow 49 percent by 2035 under the scenario in which prices rise to $133, the EIA said. Energy demand in developing countries like China and India will rise by 84 percent, outpacing growth of 14 percent in the nations of the Organization for Economic Cooperation and Development, which include the U.S., U.K. and Japan, EIA said.
World oil consumption should grow 7 percent from its 2007 level of 86.1 million barrels a day to 92.1 million barrels by 2020, the EIA said. It will increase 28 percent to 110.6 million barrels by 2035, the EIA said.
World oil production is expected to increase by 25.8 million barrels a day by 2035, with the Organization of Petroleum Exporting Countries retaining its current 40 percent share of global output.
Global natural gas consumption is predicted to rise 44 percent by 2035 to 156 trillion cubic feet. To keep pace with rising demand for the fuel from factories and power plants, natural gas production should increase 46 percent by 2035.
There should be a “substantial increase” in gas from unconventional sources such as shale rock and coal beds, the EIA said. Unconventional sources should account for 26 percent of gas production in the U.S. by 2035, 63 percent in Canada and 56 percent in China, the EIA said.
The EIA predicts world coal demand will rise 56 percent from its 2007 level of 132 quadrillion British thermal units to 206 quadrillion by 2035. Developing nations in Asia seeking to boost electricity generation and industrial output account for 95 percent of the increased coal use, the EIA said.
World carbon dioxide emissions from energy use are expected to rise 43 percent to 42.4 billion metric tons by 2035, the EIA said. By 2035, developing countries will have annual emissions that are double the carbon dioxide output of OECD countries, the EIA said.
The EIA’s projections assume no new limits on carbon dioxide and the other greenhouse gases that scientists have linked to climate change are imposed in the U.S. or other countries.