Axios | Amy Harder | November 7, 2018
Driving the news:
The big picture
The global economy is growing at a surprisingly brisk and broad pace not seen in the last decade, which has been marred by recessions in Europe, the U.S. and elsewhere. That means more oil demand, even accounting for higher efficiencies in developed countries.
"It's funny to be talking about peak demand when demand has been so strong recently," Daniel Yergin, energy scholar and vice chairman of IHS Markit said in an interview. "I think people were taken by surprise at the strength of the synchronized economic growth. They've gotten so used to thinking Europe would never recover."
The International Energy Agency, a Paris-based group that advises nations on energy policy, keeps increasing its estimates for oil demand because of this economic growth. Oil demand is around 96 million barrels a day, with the IEA predicting an increase of approximately 1.5% over the next couple of years. Oil prices, in turn, have crept up to near $60 a barrel, a level not seen since 2015.
"Based on what we know now, we would need major technological breakthroughs or weak world growth, including for large emerging and developing economies, for oil demand to peak in the next 20 years," said Gian Maria Milesi-Ferretti, deputy director of the International Monetary Fund's research department.
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