Cars Driving Oil Demand
The federal government expects global energy use to rise by nearly 50 percent in the next quarter-century, with the bulk of that increase due to strong GDP growth and rising household incomes in the developing world.
The Energy Information Administration (EIA) says energy consumption in non-developed countries will be 84 percent higher by 2035. Over the same period, energy use in the developed world will grow by 14 percent.
The EIA says oil will remain the world’s largest energy source, with transportation being the key driver of oil demand. The red line on the chart reflects that auto ownership in the developing world – China is the world’s largest car market – is expected to continue on a steady upward trend.
Energy use for transportation in the developing world is expected to rise 2.6 percent a year through 2035, while in the developed world the growth line is essentially flat (blue line).
This demand increase from the emerging economies may end up having a profound impact on price. The EIA estimates oil prices will average $79 a barrel in 2010, but jump to $108 by 2020 and then $133 in 2035.