ExxonMobil has published its Outlook for Energy 2014: A View to 2040. The oil giant sees demand for energy growing over 35% over 30 years to 2040 (1% YoY), with non-OECD contributing all of the growth in demand as OECD demand remains essentially flat. Oil remains the dominant form of energy supply, but natural gas takes the second spot from coal. Renewable energy (solar, wind and biofuels) sees the steepest growth in that period, but from a very low base. Energy-related CO2 emissions rise 1.2% YoY in 2010-25, but are then seen to start declining.
The rise in energy demand is attributable to population growth, increased urbanisation and an expanding middle class, countered by increased energy efficiency. In fact, energy efficiency, along with slower population growth, are the key reasons that OECD energy demand does not grow through 2040. ExxonMobil has China’s energy demand growing around 3% YoY in 2010-25, after which demand plateaus. Overall, global energy demand growth is slowing down, running at 1.5% YoY in 2010-25 and at 0.5% YoY for 2025-40.
Energy demand for power generation is expected to grow 53% in 2010-40, as electricity demand nearly doubles. Coal remains the principal fuel for power generation but its share of the total drops from 45% in 2010 to 32% in 2040, as natural gas consumption in power generation grows 78% in 2010-40, taking its share of total power generation to 28% in 2040.
Global liquids resources are expected to continue expanding as a result of ongoing advances in exploration and production technology. ExxonMobil estimates that by 2040, 65% of global recoverable crude and condensate resource would not have been produced. Liquid production is expected to grow in all regions bar Europe and Asia Pacific, with tight oil supply seen to grow tenfold in 2010-040 and to account for 5% of global liquids production. Crude oil imports into North America might not be required by 2030.
Natural gas consumption is expected to overtake coal as the second largest energy source by around 2025, growing on average 1.7% YoY over 2010-40. Unconventional gas is expected to make up around 65% of the supply growth and comprise a third of global output by 2040. ExxonMobil sees North America turning into a net exporter of natural gas by 2020. LNG is seen to play a key role in the growth of gas supply with LNG volumes expected to treble by 2040, comprising 15% of global gas demand.
Net managed money futures and options positions on the ICE in Brent, regarded as the most directionally driven speculative category, dropped 10.9% in the week ended 10 December, while over on the NYMEX, speculative positions in WTI increased 2.3% to reach a two-month high. Over that period, Brent dropped USD 3.24/bbl WoW to USD 109.38/bbl while WTI closed higher, up USD 2.47/bbl WoW to USD 98.51/bbl.