OK, this article gives us a little info on the assumptions made by the IEA in coming up with their prediction of Peak Demand by 2029.  Here's the critical assumptions that could turn things around and keep the oil pumping:

   The IEA cautioned its forecast for shrinking oil demand could be derailed by "relatively minor changes" in events. For example, a 0.3 per cent annual increase in the world's GDP growth, a $5 annual drop in real oil prices, or a 15 per cent slowdown in the rollout of EVs would each be enough to swing oil consumption back to growth by the end of the decade.


Let's go through these possibilities.

1- +0.3% World GDP increase over expected.-  The number they plugged in here was +3%.  This is the critical number.  A Recession would give a negative growth number.  So a global recession isn't even necessary, just a growth rate under 3%/year.  A recession at any point over the next 3 years bakes the cake, and it's highly likely.

2-  A $5 drop n "real" oil prices -  Not sure what constitutes real prices, but you can find an interactive chart here:

https://www.macrotrends.net/1369/crude-oil-price-history-chart#google_vignette

Looking at the 2024 YTD chart it's hanging around $78/bl.  So, it just needs to come down to $73.  A recession would do that, so those 2 numbers get to fight it out.  The deeper the recession, the more the oil price has to drop to keep selling it.  How low can they go with the price to keep pace?  Unknown.  During Covid the chart going back to 2012 shows $40 prices.  How much oil are they willing to sell for $40?  Not much I suspect.  They would hold and wait for the price to come back up.

3- 15% slowdown rolling out EVs-  Well, they're pretty slow already, really the only direction EVs have to go is up. lol.  The Chinese are making and selling most of them to their own population.  Over here, Tesla has nowhere to go but up, right now they can hardly even give them away on the used market.  However, a recession would alsso slow down EV sales, so that also proviides a counterbalance.  The question is though how important really are EVs to the oil consumption market right now?  I don't think it's that much, so it would take areally big slowdown to push the needle much.

So basically, it all comes down to the state of the economy, and like me, the experts at the IEA are betting on a recession by 2029.  I actually expect it sooner, like beginning this quarter or next, but in any case an annualized growth rate much above 2% would be lucky, or good numbers manipulation.  To get a 3% average over the next 3 years, you'll need some high 3s or a 4 in there to compensate.  That's even less likely.

So the demand will fall with the economy, the question is will it ever return so more oil is produced than that last heady Fall before Covid in Nov of 2018?, because the only chart you get is after the fact of how much was produced.  Demand charts are just future projections.  If the oil wasn't produced, if the demand was there it didn't get filled.

We'll just have to wait and see.  Maybe we can turn up the chart of production thru Jan 2024 soon to see how things went through 2023.

https://www.ft.com/content/cfb97534-b71b-490f-b626-6dc3487f595d

RE