LONDON – BP’s latest review of global energy developments shows markets continuing to undergo long-term changes as they adapt to nearer-term price challenges.
The 2017 edition of the BP Statistical Review of World Energy identifies a shift to slower growth in global energy demand, demand moving increasingly toward the developing economies of Asia, and a shift toward lower carbon fuels as renewable energy grows and coal use falls.
At the same time, the oil industry in particular is adjusting to the oversupply that has dominated the market in recent years.
Last year, the review found, global energy demand grew by just 1%, around half the average growth rate of the previous decade, with China and India accounting for half of all growth.
Low prices drove up demand for oil by 1.6% while growth in production was limited to 0.5%. As a result, the oil market returned broadly to balance by mid-year, but prices continued to be depressed by the large overhang of built-up inventories.
Total, production fromOPEC increased by 1.2 MMb/d, with significant increases in Iran (up 0.7 MMb/d), Iraq (up 0.4 MMb/d), and Saudi Arabia (up 0.4 MMb/d).
However, non-OPEC oil production fell by 0.8 MMb/d, the biggest annual decline for around 25 years, with most notable declines in the US (down 0.4 MMb/d), China and Nigeria (each down 0.3 MMb/d).
Natural gas production was also impacted by low prices, growing by only 0.3%, with US gas output falling, the first reduction since the opening of shale in the mid-2000s.
Australian gas production rose significantly as new LNG facilities came onstream.
Global LNG imports/exports grew by 6.2%, driven by the new Australian output. BP expects LNG production to increase by around 30% in next three years as further new projects come online.