IngentaConnect Oil outlook to 2020

Abstract:

The OPEC Conference in 2000 developed a price band target of US $22-28 per barrel for the Basket of OPEC crudes, in a bid to stabilise prices. This decision was made in the wake of a 12-month period that had seen tremendous fluctuations, with prices ranging from below $l0/b to above $30/b. It was expected that the identification of the new price band would play a major role in stabilising oil prices, to the benefit of both producer and consumer. The assessment of potential medium-to-long-term prospects for the oil market, contained herein, are intimately related to these important developments in international oil markets, as well as our understanding of evolving fundamentals.

Part 1 of this article, developed using OPEC's World Energy Model (OWEM), describes the reference case. From the demand side, a detailed analysis of both economic growth and intensity movements is used to project the growth of oil demand that can reasonably be expected over the next two decades. A resource-based approach is used to determine feasible longer-term production, utilising the latest data made available last year by the US Geological Survey.

The rest of the article deals with various scenarios. The price scenario section considers the impact of high prices, beyond $30/b, and questions their sustainability. The next section deals with tax scenarios, and shows the extent to which oil demand has been reduced by historical developments in oil product taxation. Finally, a slow growth scenario explores the implications of a pessimistic view of economic growth over the coming years.

Document Type: Original article

DOI: 10.1111/1468-0076.00101

Affiliations: 1: Director, Research Division (RD) OPEC Secretariat, in Vienna, Austria, 2: Head, Energy Studies Department (ESD), RD OPEC Secretariat, in Vienna, Austria, 3: Senior Research Analyst, ESD OPEC Secretariat, in Vienna, Austria

The full text electronic article is available for purchase. You will be able to download the full text electronic article after payment.

$50.16 plus tax Refund Policy