Energy watchdog predicts 'staggering' oil glut by 2030

A new report from the International Energy Agency predicts the growth in demand for oil is going to slow down before reaching a peak of about 106 million barrels a day by 2030.

At the same time, the agency expects oil production capacity to surge to nearly 114 million barrels per day; that's 8 million barrels per day above the projected global demand.

According to the agency "such a massive cushion could upend the current OPEC-plus market management strategy aimed at supporting prices."

Patrick De Haan, the head of petroleum analysis with GasBuddy, warns an oil overload doesn't necessarily mean a drop in gas prices for consumers.

"Keep in mind that much of the relationship between the price of oil and gasoline is not just the price of oil itself but also refining capacity here in the United States," De Haan said.

The report points to the increasing development of clean energy technologies, including surging sales of electric vehicles, as a reason for declining growth in oil demand.

A motorist fills up the tank of a vehicle at a gasoline pump at a Costco warehouse.
A motorist fills up the tank of a vehicle at a gasoline pump at a Costco warehouse.

Drivers get a break as gas prices fall

The speed of the transition to clean energy could affect refining capability.

Max Pyziur, the research director for the Energy Policy Research Foundation, said, "Electrical generation from intermittent resources such as solar and wind, I see that as being very difficult to commission. Consequently, you're going to continue to need to rely on oil and gas and coal for the duration."

De Haan added, "Really the biggest question is will refineries continue to refine oil and gas if the EV transition accelerates, or will they start shutting down their facilities."

The answer may have an impact on the prices you see at the gas pump.