Solar power will surge globally in the coming decades, but oil demand will also continue to grow, according to a new report from the International Energy Agency.
"Oil is already facing stiff competition from ever-cheaper and more environmentally friendly energy sources as traditional fossil fuel users switch to cleaner, low-carbon alternatives", IEA said in its World Energy Outlook 2018.
This sentiment comes in part on the back of rising US oil output C-OUT-T-EIA, which has grown by more than 14 percent since mid-2016 to a record 9.62 million bpd.
Fitch Ratings said in its 2018 oil outlook that it assumed 2018 "average oil prices will be broadly unchanged year-on-year and that the recent price recovery with Brent exceeding $60 per barrel may not be sustained".
The IEA said oil production will be driven by continued growth in energy-hungry industries.
"With the United States accounting for 80% of the increase in global oil supply to 2025 and maintaining near-term downward pressure on prices, the world's consumers are not yet ready to say goodbye to the era of oil", the IEA report stated.
Worldwide, oil consumption is seen reaching 97.7 million bpd in 2017, up 1.5 million bpd from 2016.
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"It is far too early to write the obituary of oil, as growth for trucks, petrochemicals, shipping and aviation keep pushing demand higher", said Birol. This latest move comes as investors expect figures to show U.S. oil production has risen.
The IEA estimates that there will be 50 million electric vehicles (EVs) on the road by 2025 and 300 million by 2040, from closer to 2 million now.
Some ministers for the Organization of Petroleum Exporting Countries said an extension of an agreement that sidelines about 2 percent of the total global demand for oil in an effort to balance the market was necessary next year.
"It's quite spectacular, because you're going to see the number of cars on the road double from one billion to 2 billion, thanks to electric vehicles and fuel economy standards", said Laura Cozzi, head of the Energy Demand Outlook division.
It argues that fuel efficiency and rising electrification will bring a peak in oil used for passenger vehicles, even with a doubling of the auto fleet to 2 billion vehicles by 2040.
Chris Watling, CEO and chief market strategist at Longview Economics, was quoted as saying that the adoption of EVs could lead to global peak oil demand as soon as 2023, which will result in oil prices crashing to $10.