The total energy consumption in the OECD economies is expected to continue to witness a decreased growth in 2009. However, with the global economy expected to recover in 2010, energy consumption in the OECD economies is expected to grow.

The improving economic conditions in 2009 and the expected recovery in
2010 will further drive the growth in energy consumption in these
economies.

Mergers in Exploration, production to rise

The uncertainty in the global economic outlook, highly volatile
commodity prices and tight credit availability had a negative effect on
the deal activity thereby decreasing the deal activity in the later
part of 2008. Since then, the commodity prices have been increasing and
the global economy is showing some signs of recovery from the
recession. Global economy is expected to grow at a positive rate in
2010. These factors and comparatively lower asset valuations is
expected to usher a new wave of merger and acquisition in the upstream
oil and gas industry by the end of 2010.

Crude oil to rise, Capex to rise in 2010

Capital expenditure of oil and gas companies after surging from 2007 to
2008 has witnessed a significant decrease in 2009. However, in 2010
capital expenditure activity is expected to go up, driven mainly by
large National Oil Companies.

With oil prices starting to stabilize at $60-80 per barrel level and as
the economic intervention by the governments across the globe takes
effect, oil and gas companies are expected to increase investments in
2010. However, these plans of 2010 and beyond are largely dependent on
the commodity prices, demand-supply and reduced costs of oil services.

Power consumption to rise

Global electricity generation is expected to continue to increase in
the years to come. In 2008, 19.53 Trillion KWh of electricity was
generated. Worldwide electricity generation is expected to increase to
20.26 Trillion KWh in 2009 and further to 21.0 Trillion KWh in 2010.
The growth in the electricity generation can be attributed to increase
in the population and economic growth in the emerging economies and a
corresponding increase in the usage of electricity for residential,
commercial as well as industrial purposes.

Nuclear Energy to have increased role

The global economic downturn is likely to have limited effect on the
nuclear industry due to the long term nature of the nuclear projects.
Further, with the long term nuclear plans of a number of emerging
countries and the recent trend toward small and medium reactors, the
nuclear industry might witness an increase in investments once the
global economy recovers in 2010.

Alternative energy to attract investments

The need to achieve energy stability, security of energy supply and
energy independence combined with the demand to minimize carbon
footprints is driving countries across the world to explore different
renewable energy technologies. Battling climate change is as much a
concern for most world governments as achieving energy independence and
security. This has forced governments to come up with schemes and
policy frameworks supporting the promotion and development of renewable
energy. With the global economy expected to be in a better shape in
2010, the renewable energy industry is expected to continue to grow.

Refining sector experience downturn

The global refining industry is witnessing a slump following the global
economic downturn after a high return period in the past few years.
Uncertain product demand due to the global economic downturn,
decreasing refinery margins and a surplus refining capacity are having
a combined negative effect on the profitability of refining operations.
These trends will continue to cast a shadow of uncertainty over the
future of refinery margins thereby making the refining sector
unattractive for the integrated oil companies in the short term.

New And Emerging Frontiers Will Increasingly Add To The Supply Of Oil And Gas In 2010

Unconventional oil and gas projects are attracting increased attention
in the wake of the inevitable production decline in the more
traditional oil and gas resources and the volatility in the oil market.
The expected recovery of the global economy in 2010 and the rise in the
commodity prices will increase the attractiveness of the unconventional
and offshore oil and gas sectors. Consequently, the share of oil and
gas production from unconventional as well as offshore resources will
continue to increase in 2010.

Climate Change policies

In order for the industry to comply with the climate change policies,
significant costs need to be incurred by the energy companies. Also,
the companies would have to eventually diversify into clean energy
sources. Nonetheless, the global economies are not even in the initial
stages of agreeing to a global climate policy which would enforce
emission cuts. This has created a lot of uncertainty on the effect of
the policy measures on the energy industry.

Coal to dominate

The global economic slowdown is expected to have very little effect on
the consumption and production of coal. The popularity of coal can be
attributed to its huge availability and lower costs as compared to
natural gas and oil. In recent years, there has been a greater shift
towards nuclear and other cleaner sources of energy to reduce the
dependence on fossil fuels, especially coal. Nevertheless coal is
expected to be the preferred choice for years to come.

Source: BusinessWire

Search to find what you want

• Non-OECD track to the global oil demand growth in 2010

    World oil demand in 2010 is forecast to grow at 0.80 million barrels per day (bpd) to reach 85.1 million bpd, according to the Organisation of Petroleum Exporting Countries’ (OPEC) latest monthly report. This remains a conservative assumption given that OECD (Organisation for Economic Co-Operation and Development) oil demand has

• Global cotton mill use to back in 2010-11

    World cotton mill use fell by 12% to 23.3 million tons in 2008/09, driven by the global economic and financial crisis that resulted in a sharp drop in consumption of textile products, according to International Cotton Advisory Committee (ICAC). ICAC’s projection for 2009/10 has become more optimistic over the last

• Oil supply is shrinking fast

     A disastrous energy crunch is looming because most of the major oil fields in the world have passed their peak production, a leading economist warned Monday. Fatih Birol, chief economist with Paris-based International Energy Agency, said such an “oil crunch” within the next five years could jeopardise recovery from the global recession.  Higher

• Oil prices could hit U.S. $ 190 per barrel if the current usage patterns continue: IEA

    World energy demand is expected to grow by some 40 per cent from between 2007 and 2030. This is the forecast given by the International Energy Agency in its latest world energy outlook.

• WTI oil prices could range between $ 71 and $ 78

    WTI oil prices could move between $71 and $78. Prices inched above $75 last week as the U.S. dollar depreciated and winter storms across the Northeastern United States caused some bullish sentiment regarding heating demand.

• Oil climbs above $ 72 in Asian trade

    Global oil prices advanced above $72 a barrel in Asian trade Monday mainly on reports of increase in energy demand amid dollar recovery. Light sweet crude for November delivery was seen trading at $72.54 a barrel at 12.00 noon while Brent crude was at $70.41 a barrel at the same

• Oil climbs above $ 72 in Asian trade

    Global oil prices advanced above $72 a barrel in Asian trade Monday mainly on reports of increase in energy demand amid dollar recovery. Light sweet crude for November delivery was seen trading at $72.54 a barrel at 12.00 noon while Brent crude was at $70.41 a barrel at the same

• Worldwide shipping sector is expected to maintain some recovery next year

    The worldwide shipping industry, which suffered a severe downturn due to the economic slump, is expected to see a steady recovery next year on the back of increasing trade volume and an eased oversupply of vessels, a Korean institute said Monday, according to Yonhap News. According to the Korea Maritime

• U.S. less on oil for energy, which left from 2035: Government

    U.S. oil demand through 2035 is not expected to return to the peak levels reached before fuel consumption fell sharply due to high petroleum prices and the recession, the government’s top energy forecasting agency said on Monday. U.S

• In Depth: OPEC Analysis Report

     Last month’s OPEC market report revealed that several encouraging trends have begun to take root, and economic indicators are for world oil demand to return to positive growth in 2010. The OPEC reference basket surged $11.38 per barrel, or almost 20% to average over $68 in June. Encouragingly, wild fluctuations appear

• Oil demand rose in the third quarter: analysts

    World oil demand rose between July and September after falling during the previous six quarters, the Centre for Global Energy Studies said in a monthly report published yesterday. The London-based CGES added that global oil demand was set to record its first year-on-year gain during the fourth quarter, although crude

• Oil price above $ 70-80 a risk for recovery – IEA

    Oil prices above $70-80 a barrel could be risky for global economic recovery, the chief economist of the International Energy Agency said. Birol told Reuters in an interview that current oil price levels were good for investment. Oil prices have more than doubled from the lows near $30 a barrel

• IEA: Growth in China is not seen, leading to oil price rally

    The International Energy Agency (IEA) does not think rapid growth in Chinese oil demand will lead to a rally in crude oil prices next year, the agency’s executive director said on Thursday. That is partly because demand for oil from industrial nations in the Organization for Economic Cooperation and Development

• China per-unit energy consumption falls 3.35% in H1

     China’s energy consumption to produce a unit of gross domestic product (GDP) dropped 3.35 percent year on year in the first half, the National Development and Reform Commission (NDRC) said in a statement Sunday. The decrease compared with 2.88 percent in the first half of last year. The commission also said

• IEA to cut long-term outlook for oil demand next week

    The International Energy Agency will “substantially” downgrade its long-term oil demand forecast in its annual energy outlook next week, the second cut in a row, the Wall Street Journal reported on Wednesday. Efforts to better manage expanding oil demand in the developed world have been more effective than first expected,