Oil Price Projected to Hit $185 in 2050
Brent crude oil is projected to hit a value of $185 per barrel in 2050, in 2018 dollars, in the high oil price case of the U.S. Energy Information Administration’s (EIA) latest International Energy Outlook report.
The report also offers a low oil price case, which places oil at $45 per barrel, in 2018 dollars, in 2050 and a reference case, which has oil at $100 per barrel, in 2018 dollars, in 2050.
The reference case reflects current trends and relationships among supply, demand and prices in the future and includes some anticipated changes over time, the report highlights. The high and low oil price cases address the uncertainty associated with world energy prices, the report notes.
“In the high oil price case, energy demand increases because non-OECD (Organization of Economic Cooperation and Development) economies grow more quickly than in the reference case, despite tighter petroleum supply conditions,” the report states.
“Although energy consumption rises, higher oil prices limit the growth in liquid fuels and consumers conserve or switch to alternative fuels whenever possible,” the report adds.
The report notes that in the low oil price case, lower economic activity, “especially in countries that are not a part of the OECD”, discourages energy consumption.
“Simultaneously but independently, greater resource availability and lower extraction costs encourage additional petroleum supplies, despite the reduced economic growth. The resulting lower oil prices encourage liquid fuels consumption and discourage energy conservation and fuel switching,” the report adds.
The EIA’s International Energy Outlook presents an analysis of long-term world energy markets in sixteen regions through 2050. The report highlights that energy market projections are uncertain “because the events that shape future developments in technology, demographic changes, economic trends and resource availability that drive energy use are fluid”.
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