IEA Sees 2035 Crude at $247 Barrel, Almost Twice OPEC’s Forecast
The International Energy Agency expects nominal crude prices to reach $247 a barrel by 2035, almost twice the $133 assumed by the Organization of Petroleum Exporting Countries, even as expectations for demand converge.
The IEA, which represents 28 oil-consuming nations, bases its assumptions on increasing marginal costs as more supply is needed to balance higher demand, according to a report received by e-mail today. OPEC, supplier of 40 percent of the world’s oil, said in the joint statement it expects prices to be much lower, based on “the behavior of marginal costs, the impact of dollar exchange-rate movements on recent prices and potential future developments, and signals from futures prices.”
“Uncertainty affecting the global economy in the short term associated with price volatility witnessed over the past years has fogged structural development making energy forecasting more difficult than ever,” the IEA said.
Both agencies expect demand for crude at about 74 million barrels a day by 2035, according to the report, prepared by the Riyadh-based International Energy Forum before a meeting of the IEA and OPEC this week in the Saudi capital. The IEF is a group of nations accounting for more than 90 percent of global oil and natural-gas supply and demand, established as a forum for producing and consuming countries to discuss international energy security.
OPEC and the IEA converge in their medium-term price assumptions. The IEA expects nominal Brent crude to fall from $109 a barrel in 2011 to $91 a barrel in 2016, while OPEC predicts oil will remain at $85 to $95 a barrel to 2020.
Crude for March delivery on the New York Mercantile Exchange was at $99.12 a barrel, down 46 cents, at 4:35 p.m. London time. Brent oil for March settlement was down 38 cents at $110.20 a barrel on the ICE Futures Europe exchange in London.
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