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OPEC: OPEC's World Oil Outlook 2017 Launched in Vienna

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The Organization of Petroleum Exporting Countries (OPEC) is a group consisting of 12 of the world’s major oil-exporting nations. OPEC was founded to coordinate the petroleum policies of its members, and to provide member states with technical and economic aid. In the short term, the Organization of Petroleum-Exporting Countries (OPEC) has significant influence on the price of oil. Over the long term, its ability to influence the price of oil is quite limited, primarily because individual countries have different incentives than OPEC as a whole. However, in time the price migrates lower as supply is not meaningfully cut. In the end, the forces of supply and demand determine the equilibrium price. OPEC announcements can temporarily affect the price by altering expectations. In recent years, OPEC’s share of world oil production has declined, especially with new production coming from the United States and Canada. Oil prices averaged above $100 per barrel between 2007 and 2014 due to geopolitical tensions, increased demand and tight supply. This elevated price of oil created huge incentives for innovation in new production techniques that led to oil extraction and more effective drilling techniques.

Oversupply later lead to a crash in crude resulting in prices as low as $40-50 per barrel. This has led to new non-OPEC supply that has dented OPEC’s ability to influence oil prices, which caused oversupply and a subsequent crash with prices as low as $37 per barrel. The 2017 OPEC World Oil Outlook (WOO) was launched at the OPEC Secretariat in Vienna.

Some highlights by OPEC in their 2017 OPEC World Oil Outlook were

  • Total primary energy demand is set to increase by 35% in the period to 2040;Oil is expected to remain the fuel with the largest share in the energy mix throughout the forecast period to 2040
  • Long-term oil demand has been revised upward by 1.7 million barrels a day (mb/d) compared to the WOO 2016, with total demand at over 111 mb/d by 2040;
  • there is no expectation for peak oil demand over the forecast period to 2040;
  • Developing countries will continue to lead demand growth, increasing by almost 24 mb/d, to reach 67 mb/d by 2040
  • Long-term demand growth comes mainly from the road transportation (5.4 mb/d), petrochemicals (3.9 mb/d) and aviation (2.9 mb/d) sectors.
  • Oil demand in the road transportation sector is driven by the increasing car fleet in Developing countries and declining oil use per vehicle in the OECD region.
  • The car fleet is anticipated to change smoothly over the forecast period. In the passenger car segment, electric vehicles are estimated to represent 12% of the car fleet by 2040;
  • Non-OPEC liquids supply is forecast to increase from 57 mb/d in 2016 to 62 mb/d in 2022, but in the long-term non-OPEC liquids output is anticipated to see a decline, dropping to 60.4 mb/d by 2040, with US tight oil estimated to peak just after 2025.
  • The demand for OPEC crude is anticipated to expand to 41.4 mb/d by 2040.The share of OPEC liquids in total global liquids supply is estimated to increase to 46% by 2040, from 40% in 2016.

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OPEC: OPEC’s World Oil Outlook 2017 launched in Vienna. (2019, March 12). GradesFixer. Retrieved October 19, 2021, from https://gradesfixer.com/free-essay-examples/opec-opecs-world-oil-outlook-2017-launched-in-vienna/
“OPEC: OPEC’s World Oil Outlook 2017 launched in Vienna.” GradesFixer, 12 Mar. 2019, gradesfixer.com/free-essay-examples/opec-opecs-world-oil-outlook-2017-launched-in-vienna/
OPEC: OPEC’s World Oil Outlook 2017 launched in Vienna. [online]. Available at: <https://gradesfixer.com/free-essay-examples/opec-opecs-world-oil-outlook-2017-launched-in-vienna/> [Accessed 19 Oct. 2021].
OPEC: OPEC’s World Oil Outlook 2017 launched in Vienna [Internet]. GradesFixer. 2019 Mar 12 [cited 2021 Oct 19]. Available from: https://gradesfixer.com/free-essay-examples/opec-opecs-world-oil-outlook-2017-launched-in-vienna/
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