Despite current weak fundamentals and the impact of a global recession on energy consumption, U.S. major ExxonMobil has produced a very optimistic outlook for the industry, saying that growing populations and economic growth in many countries would help increase oil demand by an average of 1.2 percent per years between 2005 and 2030.

The report, entitled Outlook for Energy: A View to 2030, argues that oil demand growth would come despite significant gains in energy efficiency. It projects that global oil demand would jump 35 percent to 310 million bpd in 2030 from 229 million bpd in 2005.

The company’s latest projection is down from last year’s, which saw average annual demand growth rate at 1.3 percent. But the economic situation was different in 2007, when both China and the U.S. were still growing and energy demand projections by just about everyone were that energy consumption would continue to climb long term. Oil prices doubled within a year to $147 bbl in July.

Since then, the global financial crisis that started in mid September has wiped out consumer confidence, causing a crash in oil prices, which are now down to $46 bbl today. Most analysts, including those at BP, Energy Information Administration and the International Energy Agency, have revised down sharply their outlook for 2008 and 2009.

Long-term outlook for the industry remains uncertain because much will depend on economic recovery. The National Bureau of Economic Research said Dec. 2 that the U.S. economy has been in recession for a year and won't come out of until mid next year. Japan and Europe are also in recession while the Chinese economy is starting to slow down. And so, as recession sweeps through the world's richest nations, demand for oil is seen trailing off, as consumers move to conserve energy and to look for alternative energy sources.

But in its report, ExxonMobil said the use of alternative fuels will grow, but oil will still remains the major source of energy. Oil is expected to meet close to 80 percent of global demand through 2030 due to their “abundance, affordability and availability.”

Power generation will be the largest and fastest-growing energy-demand sector through 2030, the report says, adding that China, which today meets almost 90 percent of its power needs with coal, will see its energy demand for power generation more than double by 2030, surpassing U.S. demand by more than one-third.