U.S. oil boom leaves OPEC sidelined from demand growth

Discussion in 'Americas' started by average american, May 15, 2013.

  1. average american

    average american Senior Member Senior Member

    Aug 28, 2012
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    Reuters) - Rising U.S. shale oil production will help meet most of the world's new oil demand in the next five years, even if the global economy picks up steam, leaving little room for OPEC to lift output without risking lower prices, the West's energy agency said.

    The prediction by the International Energy Agency (IEA) came in its closely watched semi-annual report, which analyses mid-term global oil supply and demand trends.

    "North America has set off a supply shock that is sending ripples throughout the world," IEA Executive Director Maria van der Hoeven said on Tuesday.

    "The good news is that this is helping to ease a market that was relatively tight for several years," she added. Oil on Tuesday traded near $103 a barrel, well below its peak of $147 in 2008.

    The IEA said it expected global demand to rise 8 percent on aggregate between 2012 and 2018 to reach 96.7 million barrels per day (bpd) based on a fairly optimistic assumption by the International Monetary Fund of 3 to 4.5 percent global economic growth a year during the period.

    That incremental demand will be met mainly by non-OPEC production, which will rise by more than 10 percent between 2012 and 2018 to 59.31 million bpd, the IEA said, increasing its estimate of non-OPEC supply in 2017 by 1 million bpd versus its previous report in October 2012.

    The United States will overtake Russia as the world's largest non-OPEC producer as early as 2015, the IEA said.

    That may leave OPEC, which had been long seen as the last resort for the world to meet rising demand, with output fluctuating around the current levels of 30 million bpd for the next five years.

    The agency cut its estimate of the demand for OPEC crude in 2017 to 29.99 million bpd, down by 1.22 million bpd from its previous report six months ago.

    It said OPEC's spare capacity will rise by over a quarter to reach 6.4 million bpd or 6.6 percent of global demand, giving an additional cushion to potential supply shocks, the report said.

    The adoption of U.S. shale technology could help Russia and China boost production from unconventional reserves, but new projects may slow in other areas.

    "Several members of the (OPEC) producer group face new hurdles, notably in North and sub-Saharan Africa. The regional fallout from the 'Arab Spring' is taking a toll on investment and capacity growth," the IEA said.

    "Downward adjustments across the (OPEC) group are partly offset by substantially stronger growth in Saudi capacity than previously expected, reflecting newly announced development projects," it added.

    Iran's sustainable crude production capacity is likely to fall by as much as 1 million bpd to 2.38 million bpd by 2018, the lowest in many decades, due to Western sanctions, the IEA said.
    UPDATE 3-U.S. oil boom leaves OPEC sidelined from demand growth | Reuters
    parijataka likes this.
  3. Austin

    Austin Regular Member

    Sep 19, 2011
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  4. W.G.Ewald

    W.G.Ewald Defence Professionals/ DFI member of 2 Defence Professionals

    Sep 28, 2011
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    North Carolina, USA
    If only :rolleyes:
  5. amoy

    amoy Senior Member Senior Member

    Jan 17, 2010
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    music to the ears of @asianobserve too

    Sent from my 5910 using Tapatalk 2
    Last edited by a moderator: May 10, 2015
  6. Abhijeet Dey

    Abhijeet Dey Regular Member

    May 6, 2013
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    Kolkata, India
    Why is India sleeping when other countries are developing shale technology? Due to high trade deficit in India, people are becoming poorer and poorer. Demand for crude oil in India has increased. SHAME :tsk: :yell:

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