The oil sector of the stock market has been the best-performing sector this year, and based on a new forecast for oil demand from OPEC, that could continue, at least over the short term.
In OPEC’s annual report, the cartel expects global oil demand to stay strong well into the 2040s as the global population grows to 9.5 billion people. Demand is projected to rise by almost 9 million barrels a day by 2025 to 105.5 million barrels a day, driven by increasing demand from developing countries. However, oil demand in developed countries could peak by 2024.
The report predicts a declining role for Western oil companies, which aren’t exploring as much for oil as they used to, and are investing more in low carbon alternatives.
OPEC is calling for trillions of dollars worth of investments in the oil industry over the next two decades to meet the booming demand for fossil fuel into the middle of the century. In the annual report, the cartel says the oil industry would need investments totaling $12.1 trillion by 2044 to satisfy demand, $300 billion more than expected just last year.