IEA says hopes of higher, stable oil prices could be dashed quickly

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IEA says hopes of higher, stable oil prices could be dashed quickly

"This is why, absent any geopolitical premium, we may not have seen a "new normal" for oil prices", the IEA said.

The dramatic shifts envisioned by the IEA in its World Energy Outlook would transform the US from an energy importer into a major player in global markets capable of producing 30 million barrels of oil and gas a day by 2025.

Opec said in the latest edition of the World Oil Outlook forecasts that oil would supply just over 27 per cent of worldwide energy needs in 2040, while natural gas will see its share at slightly more than 25 per cent.

Some ministers for the Organization of Petroleum Exporting Countries said an extension of an agreement that sidelines about 2 percent of the total global demand for oil in an effort to balance the market was necessary next year.

It believes that global energy demand will rise 30% by 2040, driven by higher consumption in India.

The biggest threat to market balances, aside from a tempering in demand, is the growth in supply from non-OPEC nations.

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an global oil conference.

Yet that could still change, the IEA said.

Nevertheless, U.S. shale output is expected to decline from the middle of the next decade, and with investment cuts taking their toll on other new supplies, the world will become increasingly reliant once again on OPEC, according to the report.

The United States can look forward to many more years of an unprecedented oil and gas boom.

The IEA estimates that there will be 50 million electric vehicles (EVs) on the road by 2025 and 300 million by 2040, from closer to 2 million now.

Oil inventories in the world's richest nations fell by 40 million barrels in September, breaking below 3.0 billion barrels for the first time in two years, driven in part by Hurricane Harvey, which shuttered much USA refining capacity in August.

"Next year's demand growth will struggle to match this", the IEA said. Forecasts for shale-oil output in 2025 were bolstered by 34 per cent to 9 million barrels a day.

Global oil demand growth is likely to have slowed to 1.3 million bpd in the third quarter of this year, in part because of the impact of hurricanes Harvey and Irma in August and September on US consumption.

"Solar is forging ahead in global power markets as it becomes the cheapest source of electricity generation in many places", said Fatih Birol, executive director of the IEA.

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