IEA Predicts Tight Oil Market Without Cash Infusion
- Author: Zachary Reyes Mar 08, 2017,
Mar 08, 2017, 15:00
In fact, the USA oil and gas industry is expected to boost spending this year by about 35%.
Oil prices may struggle to breach $60 per barrel, regardless of how much OPEC cuts, if the US keeps increasing production, according to a Reuters poll.
In the last three years, the oil price has been on a roller coaster.
Besides the rising US supplies, markets are also bracing for a interest rate increase by the Federal Reserve around the middle of this month, a move which could strengthen the dollar. "But this is no time for complacency".
If the EIA report confirms the API figures then coupled with lower demand expectations, we could see a wash-out to the downside.
Oil demand will rise in the next five years, passing the symbolic 100 MMb/d threshold in 2019 and reaching about 104 MMb/d by 2022.
Falih's comment on Tuesday also appeared to mark a shift toward a grudging acceptance of the sustained US light tight oil revolution, partly due to the strength of the upstart USA industry and also the changing political winds in Washington where the new USA administration is keen to unleash domestic crude oil and natural gas production to attract investment, create jobs and reduce dependence on OPEC exports. "Alternatively, if prices are at $50/bbl, it could decline from the early 2020s".
"Depending upon our assessment in the first half of the year, we will decide with our partners what to do in the second half", Falih said. The fall in United States crude oil production could support crude oil (RYE) (IXC) (FENY) prices.
Read US Crude Oil Production: Highest Level since March 2016 for more on weekly US crude oil production. It rises to 609, the 7th straight rise, as of last Friday's Baker-Hughes Rig Count - the highest level since October 2015, but still about 1,000 rigs below the 2014 peak.
Those countries' efforts were offset by increases from Iran, Nigeria and Libya that were permitted under the terms of the agreement, meaning OPEC's total output remains 415,000 BPD above the target in the November 30 deal.
Not enough investment outside the U.S.
Achieving energy sustainability with increased production of renewable energy and cleaner fuels. "The Energy Information Administration's (EIA) Drilling Productivity Report shows similarly improvements in production per rig". "It is out of the strong growth in the economy and the population growth". "I must tell you there was never a better time to be in India".
"Output picks up rapidly, however, rising by more than 500,000 b/d during the course of the year to a new all-time high by end-2017".
Oil prices have been benign for almost two years due to a glut.
Fatih Birol, executive director of the International Energy Agency (IAE), speaks at the LNG Producer-Consumer Conference 2016 in Tokyo, Japan, on Thursday, Nov. 24, 2016. Production from the Permian alone was said to increase by 70,000 b/d over the period.
"The supply of NGL has expanded by an impressive 1.4 million b/d, or almost 70%, to 3.5 million b/d over the past six years".
Providing affordable energy to consumers by developing oil infrastructure and expanding the natural gas grid network.
Russian Federation has taken over from Saudi Arabia as the world's largest supplier of crude oil, according to the Riyadh based Joint Organizations' Data Initiative. "Today we are in situation where oil demand is expected to continue to grow". The IEA is hoping to see that increase by 20 per cent, a further $90 billion U.S. in 2017. "Recently completed oilsands projects, and sites already under construction, will drive growth to 2022". Mexico was fourth with 623,000 bpd, Iraq fifth with 414,000 bpd, Colombia sixth with 315,000 bpd, and Ecuador the seventh largest supplier with 250,000 bpd.
"I'm most troubled by lagging progress of long-cycle development projects, which are needed to provide the "base load" of future global supplies", he said.
Oil product futures were mixed.
"From 2020 onwards, however, increased investment is set to reverse the trend", IEA said. "Of this, crude oil and condensates account for roughly 2.1 million b/d". "Trade routes will lengthen as Asia needs more oil but the Middle East can't meet it", said Birol.
Russia's energy minister said Monday that the nation is gradually reducing its oil production in line with an agreement reached with OPEC late past year and should be fully compliant by the end of April.