Global energy outlook: an oil price scenario analysis

At stable oil prices in the low 20s (US dollars per barrel), a reference case for oil market development sees annual oil demand growth of 1.5 million barrels per day over the period 2000-10. At these prices, non-OPEC production growth, mainly from developing countries and the former Soviet Union, is expected to meet less than one-third of this increase in demand; this means that an annual rise in output of around 1 mb/d is required from OPEC, increasing to 1.4 mb/d yearly over the period 2010-20. However, high prices, above 30 dollars/b, lead to lower oil demand, and, in particular, a strong response in non-OPEC production for both conventional and unconventional oil. Consequently, there will be a sharp reduction in OPEC market share, with even production levels having to continually fall. Such a scenario suggests that a price of 30 dollars/b and above may be unsustainable. The moot question remains at what price non-linear non-OPEC production responses may be triggered in the future. (author)