Oil Production Activities in Libya Increased Over Past 6 Months
- Author: Zachary Reyes Mar 08, 2017,
Mar 08, 2017, 17:17
Global oil supply could struggle to keep pace with demand after 2020, risking a sharp increase in prices, unless new projects are approved soon, according to the latest five-year oil market forecast from the International Energy Agency (IEA).
Oil prices may struggle to breach $60 per barrel, regardless of how much OPEC cuts, if the USA keeps increasing production, according to a Reuters poll.
Speaking at a press conference at IHS CERAWeek in Houston, IEA Executive Director Fatih Birol emphasized the importance of increasing upstream investment while also taking demand-side measures to cushion against the looming market crunch.
Earlier on Tuesday, the Energy Information Administration (EIA) forecast that USA crude oil production would reach new heights by 2018, to 9.7 million barrels per day.
Novak also credited Russia's agreement last year with OPEC to limit production for boosting oil prices by almost 100 percent from lows near $30 a barrel a year ago.
Demand meanwhile will reach 104 million barrels per day by 2022, up by 7.3 million barrels per day, with all of the growth coming from developing countries and Asia and demand in India starting to outpace China, leading to a tight market.
Saudi energy minister Kalid Al-Falih has described talk of peak oil demand, in the face of rising acceptance of electric vehicles and renewable energy schemes, as unsafe and misguided.
The production-reduction pact, which was joined by non-Opec countries including Russian Federation and Kazakhstan, was meant to reduce global output by about 1.8 million bpd, and bring supplies closer to demand.
In the last three years, the oil price has been on a roller coaster. We expect this upswing in production to continue throughout 2017 due to the rise in rig activity, increased capex budgets, and the roughly two- to four-month lag between spudding shale wells and production. A sharp rise from the US shale patch could undo the Saudi-led deal to reduce the global oil glut. The National Oil Company (NOC) is 59 percent they operate, and then two other companies have the balance...
"Compliance from the 11 (OPEC) member countries needs to improve and the present agreement needs to be prolonged beyond June in order to achieve meaningful drawdown in global oil inventories", PVM analyst Tamas Varga said. "And unless investments globally rebound sharply, a new period of price volatility looms on the horizon", said Birol. But last month, OPEC Secretary General Mohammad Barkindo said he wants compliance on the output deal to rise past 90% to almost 100%. The key to a balanced recovery will be to carefully manage how much "water" we put on the new growth. In the next few years, crude supply will increase in Brazil, Canada, the U.S., and elsewhere. This estimate is likely to rise because of the API report.