BP forecasts slowdown in oil demand growth

World oil demand growth will slow gradually over the next two decades, British energy giant BP forecast Wednesday in its annual outlook for the industry.

Total global energy demand was set to increase by about 30 percent through 2035, "driven by increasing prosperity in developing countries, partially offset by rapid gains in energy efficiency", BP said in its Energy Outlook 2017.

For oil alone, "demand grows at an average rate of 0.7 percent a year, although this is expected to slow gradually over the period", the study added.

In comments published alongside the findings, BP chief executive Bob Dudley noted that "traditional centres of demand are being overtaken by fast-growing emerging markets.

"The energy mix is shifting, driven by technological improvements and environmental concerns. More than ever, our industry needs to adapt to meet those changing energy needs," he said.

According to BP, all of oil's demand growth between 2015 and 2035 will come from emerging markets and half from China alone.

But "the impact of electric cars, together with other aspects of the mobility revolution, such as self-driving cars, car sharing and ride pooling, is one of the key uncertainties surrounding the long-term outlook for oil", said BP group chief economist Spencer Dale.

"The possibility that the most important source of growth in oil demand in the 2030s won't be to power cars or trucks or planes, but rather used as an input into other products, such as plastics and fabrics, is quite a change from the past," he added.

BP noted that the slowing rate of oil demand growth is in contrast to an abundance of world crude.

The report said such an over-supply could cause low-cost producers, such as OPEC's Middle Eastern members, Russia and the United States, "to use their competitive advantage to increase their market share".

Oil prices have slumped in recent years on a global supply glut, hitting 13-year lows under $30 a barrel at the start of 2016.

They have since rebounded sharply to back above $50 thanks to a recent deal by OPEC and non-cartel members to limit output.