The reasons for the positive demand revisions come from every region of the global oil market, with stronger economic activity the main reason for the more optimistic outlook.
Critics of the EIA's long-term projections can cherry-pick through the different scenarios to justify almost any outlook that suits their bias.
The past two years have reminded many observers that black gold is tough to beat, no matter what commitments countries make, and that countries like China still have a lot of room to grow.
Although shifts are taking place with EVs, autonomy, and more stringent fuel economy, it is not inevitable that we’ll shortly be in a post-oil world and that demand will peak sooner rather than later.
In order for prices to break out of the current range of $40-$50, there needs to be a sharp drawdown in crude stocks, but so far that hasn't happened.
Historically high oil output obscures the fact that OPEC is also experiencing some of its worst-ever unplanned outages. Combined, the volumes lost to violent conflict, political disputes and other setbacks add up to almost 3 mbd.
The fight over territory is less about a scramble for resources in the South China Sea than it is about asserting sovereignty and hegemony in the region. Control over oil and gas reserves happens to be one component of that objective, but is not necessarily central to it.
The contradiction of proposed increases in fuel efficiency standards for large trucks is that although they will reduce oil consumption, they will also discourage the adoption of alternative vehicles that run on natural gas and make them less competitive in the trucking sector.
A number of traders have come together under the hashtag #OOTT, the Organization of Oil Trading Tweeters, to share oil news, events, and a public data set of tanker traffic and global oil trade flows that rivals some of the best proprietary market analytics.
Although OPEC is not taking action to shore up prices in the current environment, the situation is likely to be more in OPEC’s favor in the medium to long term. Conditions will change to give it more market share and influence over prices in the coming decades.