Demand for oil to drop

Demand for oil to drop

IEA said it had cut its longer-term oil price projections from previous year, partly because of the falling cost of both renewable and conventional sources of energy, the worldwide push to tackle climate change and improve air quality and the boom in United States shale oil and gas output.

The second development, which has already dented the Canadian oilpatch, is the rise of USA tight oil and gas that is taking dollars and focus away from the Western Canadian industry.

The International Energy Agency said in its market report for November that recent trends toward balance were supported by lower production from OPEC members like Iraq and Venezuela, which may be temporary.

The IEA noted that output by the Organization of the Petroleum Exporting Countries was down by 830,000 bpd year-on-year in October, although demand for the group's crude is expected to fall to 32.6 million bpd in the fourth quarter of this year and to 32.0 million bpd in the first quarter of 2018. The IEA also predicts that wind power will become the leading source of electricity generation in the European Union shortly after 2030.

In its monthly Oil Market Report for November, released Tuesday morning, the International Energy Agency (IEA) said that global crude supplies rose by 100,000 barrels per day in October to 97.5 million barrels per day.

"While other major companies continue to maintain a presence in oil sands operations, it remains an open question whether the exit of these companies will impact prospects for oil sands development over the longer term", the IEA said.

Growth in energy demand is half what it would have been without improvements to efficiency.

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"Yet this is precisely what is happening as a result of the US shale revolution - both for oil and for natural gas", the IEA said.

At the same time, the renewable energy sources will become more important.

"The U.S. [shale] oil industry avoided the blow by morphing into a leaner, more agile version of its former self; it has since proved remarkably resilient to lower prices", the IEA said.

"EVs are coming fast, but it is still too early to write the obituary for oil", the IEA states, with global oil demand steady at 104 million bpd by 2040, compared to 94 million bpd in 2016, according to its most-likely scenario.

Crude has climbed lately to a two-year high around $57 USA a barrel in trading in NY, although it is not seen making much larger gains due to rising U.S. output.

After an upbeat performance last week, oil prices edged lower for a second day Tuesday.

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