The oil markets will be dominated by United States in the coming years, satisfying 80% of global demand growth until 2020. Detracting from the Organization of Petroleum Exporting Countries (OPEC), warned the International Energy Agency (IEA).
Driven by the production of shale oil, “United States will put its stamp on the oil markets for the next five years,” said the executive director of the IEA, Fatih Birol, speaking on Monday as part of the energy conference CERAWeek from IHS Markit.
Oil Markets Out of pace
“The problem is that global energy investments outside of the US domestic shale are not keeping pace with global trends in oil demand growth and the oil shortage could finally emerge,” Birol said.
Investment in oil and gas production internationally still does not recover from the 2014 fall in prices, he said.
Birol pointed out that world oil production will not reach maximum oil demand in the coming years, so more investment in extraction is needed, given that each year about 3 million barrels per day are no longer produced when oil mature fields are exhausted.
ANNUAL REPORT FOR OIL MARKETS
In its annual report on the oil markets, issued on Monday, the AIE projects that the United States, “thanks to the shale revolution” will reach by 2023 a total oil production of close to 17 million barrels a day, compared to 13.2 million daily produced in 2017.
Growth is led by the Permian Basin in southwest Texas; production is expected to double by 2023.
Most of the new US oil production will be exported to Asia, Europe and elsewhere as new pipelines emerge from the Permian Basin of western Texas to port centers in Corpus Christi and Houston, Birol said.
“We can not ignore growth from shale,” he said. “It is coming very strongly and will affect not only the behavior of established producers, but also others. This will affect everyone, “he said.
The IEA quoted in its annual report that Brazil, Canada, Norway, Iraq and Iran are also increasing production. But much more slowly, although part of that is offset by decreases in Venezuela and other nations.
The IEA does not see in its report much growth in oil production in OPEC countries. Partly due to the agreement to limit production to help boost world oil prices.
Birol said the IEA may be underestimating global oil and gas demand in the coming years. Especially if oil markets prices remain high and the petrochemical sector continues to rise. Along with the grow of the Texas Gulf Coast and Louisiana.
“The petrochemical sector is one of the blind spots in the debate over the oil markets,” Birol said. When most of the conversation focuses on the oil used to produce transportation fuels.
Oil Markets rises it forecasts of higher demand
Oil markets prices rose on Monday in conjunction with the US market on the prospect of robust growth in demand. And the fear that OPEC members’ output will rise at a much slower pace in the coming years.
Futures of the Brent benchmark gained 1.17 dollars, or 1.82%, to 65.54 dollars a barrel, while the US West Texas Intermediate (WTI) rose 1.32 dollars, or 2.16%, to 62.57 dollars a barrel.
For its part, the Mexican export mix rose 2.29%, or 1.24 dollars, to settle at 55.46 dollars a barrel.
The prices, which were quoted stable earlier in the session, began to advance in conjunction with the shares. Wall Street’s S & P 500 index rose 1.10 percent.
Analysts also said prices were boosted on Monday by “bullish comments” from ministers of the Organization of Petroleum Exporting Countries. Other industry participants at the CERAWeek conference in Houston, the world’s largest energy event.
Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London, said comments on “the deteriorating profile of Venezuela’s production, coupled with prospects for strong compliance with the OPEC-led reduction of pumping agreement, backed the prices of crude oil. ”
Ecuador’s Minister of Hydrocarbons, Carlos Perez, said Venezuela’s output was 1.5 million barrels per day less than its historic capacity.
Speaking in the framework of CERAWeek, the official added that Venezuela should address the deficit by itself.