America's oil and gas output could soar 25% by 2025

America's oil and gas output could soar 25% by 2025

At the same time, the renewable energy sources will become more important. Despite the cautious sentiment, traders said oil prices were unlikely to fall far, largely due to supply restrictions led by the Organization of the Petroleum Exporting Countries and Russian Federation, which have helped reduce excess stockpiles.

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. "This is why, absent any geopolitical premium, we may not have seen a "new normal" for oil prices".

If US production stays at current levels, the IEA said, and a trend towards adopting electric cars accelerates, prices could stay between US$50 and US$70 a barrel until 2040.

Lower prices are helping to support oil demand, and the IEA raised its projections for global consumption through to 2035, despite the growing popularity of electric vehicles.

"Next year's demand growth will struggle to match this", the IEA said.

In Abu Dhabi on Monday, the UAE Minister of Energy and Industry Suhail bin Mohammed Faraj Faris Al Mazrouei, said that oil producers were expected to unanimously extend a production cut accord later this month, but its duration was still under discussion.

The other three include: a growing electrification of energy; a shift to a more services-oriented economy and a cleaner energy mix in China; and the resilience of shale gas and tight oil in the US.

Increased oil production from countries not in the OPEC cartel had helped push global output higher in October, the report said.

American shale producers have been forced to endure a collapse that sent crude prices from $100 a barrel in 2014 to a low of $26 in 2016.

In a monthly report, the Paris-based body said it had revised down its demand forecasts for both this year and next by 0.1 million barrels per day (mb/d).

Fuel efficiency and rising vehicle electrification will bring a peak in oil used for passenger vehicles, even with a doubling of the auto fleet to two-billion vehicles.

Christopher Kuplen, BofAML's Research Analyst, argues that since 55 per cent of global oil is consumed in transportation, of which more than half by passenger vehicles, the demand for oil would eventually fall.

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.

The New Policies Scenario still projects that global energy-related carbon dioxide (CO2) emissions will increase slightly to 2040, an outcome that is insufficient to avoid the severe impacts of climate change.

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