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Page added on March 8, 2017

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Falih Says Peak Oil Demand Talk Misguided

Falih Says Peak Oil Demand Talk Misguided thumbnail
  • Assumptions about stranded oil seen as discouraging investment
  • IEA chief says growth may be slowing, but agrees no peak near

Saudi Arabia’s top oil official dismissed the notion that global demand may soon peak and leave billions of barrels of untapped crude stranded in fields that will never be drilled.

Khalid Al-Falih, energy minister for the world’s biggest oil-exporting nation, called talk about peak demand among energy executives, analysts and activists “misguided,” and predicted worldwide demand will reach 100 million barrels a day “very soon.” Al-Falih made his remarks Tuesday in a packed-house address at CERAWeek by IHS Markit in Houston, the most influential oil industry conference of the year.

Although Al-Falih framed his comments in the wider context of the need to invest in future oil production, his warning comes as the kingdom prepares to sell shares in its state-owned energy giant Saudi Aramco. The Aramco public offering is on track for a 2018 listing, he said. The company and government officials are working on bringing internal accounting in line with standards observed by publicly traded companies, he said.

Al-Falih’s assessment drew support from powerful voices in the international energy sphere.

There is “no peak in oil demand we see,” said Fatih Birol, the executive director at the International Energy Agency, during a CERAWeek panel discussion later in the day. “Maybe the growth is slowing down, but no peak.” OPEC Secretary-General Mohammad Barkindo at the same meeting said he doesn’t believe a peak will occur in the “foreseeable future.”

Endangering Growth

Assumptions that demand will stop growing or even atrophy could discourage investment in new oil exploration projects, crimping future supplies and triggering price shocks that would endanger economic growth, Al-Falih said.

The statements follow comments by Royal Dutch Shell Plc’s Chief Financial Officer Simon Henry on March 2 that demand for oil could peak in as little as five years, a rare statement in an industry that commonly forecasts decades of growth.

Even as the costs of renewable energy sources decline and alternatives grab an every-bigger share of the pie, climate change concerns and technological advances won’t be enough to sideline crude oil, Al-Falih said.

Bloomberg



4 Comments on "Falih Says Peak Oil Demand Talk Misguided"

  1. penury on Wed, 8th Mar 2017 2:45 pm 

    Famous last words “no one could see that coming”.

  2. peakyeast on Wed, 8th Mar 2017 2:59 pm 

    Venezuela is the current example showing that a too low price will collapse a country and possibly hit the production too.

    2008 Has shown that there is a price which is too high for consumption anywhere near current levels.

    The hills group shows that there is an equivalent action to the ELM btw. these two…

    That Kingdom of Saudi Arabia has to balance the budget shows that they too are running out of maneouvering space…Even if they will be one of the last to stand.

    Even talking about running out of viable Allah to burn is a catastrophe:

    “Assumptions that demand will stop growing or even atrophy could discourage investment in new oil exploration projects, crimping future supplies and triggering price shocks that would endanger economic growth, Al-Falih said.”

  3. Sissyfuss on Wed, 8th Mar 2017 4:54 pm 

    I think his bungee cord is cutting off the circulation to his prefrontal cortex.Allah Achtung!

  4. Nony on Wed, 8th Mar 2017 7:39 pm 

    He’s trying to talk the price up.

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