Shale Revival | Russell T. Rudy Energy LLC
“Rigzone” reports that despite low prices and falling production, U. S. oil output will recover to a record high of 14.2 million barrels of oil per day (bopd) by 2021 according to the International Energy Agency (IEA).
The shale component of U. S. oil output is projected to drop by 600,000 bopd this year and another 200,000 in 2017, before ultimately reaching 5 million bopd in 2021, a net increase of 770,000 bopd over 2015 levels. An IEA spokesman is quoted as saying, “Anybody who believes that we have seen the last of rising LTO (light tight oil, or shale oil) production in the United States should think again; by the end of our forecast in 2021, total U. S. liquids production will have increased by a net 1.3 million bopd compared to 2015.”
The IEA postulates that declining shale production will help reduce the global oil surplus and nudge the market back in to balance by 2017. However, the agency dismisses the importance of any OPEC/non-OPEC agreement to freeze production at current levels.
From 2009 to 2015 the global oil supply increased by 11 million bopd. However, the IEA expects global inventories to increase by only 4.1 million bopd from 2015 to 2021. Low prices will result in lower production and inventory levels, assuming demand continues to grow.
The price collapse has been especially hard for OPEC countries. The IEA predicts that the cartel’s revenues will drop to $320 billion this year as opposed to their peak of $1.2 trillion in 2012. This in turn will limit OPEC production growth to only 800,000 bopd by 2021, as new projects will be postponed due to low prices.
The IEA concludes that “Iran, now free of nuclear sanctions, emerges as the biggest source of growth within OPEC over the six-year forecast period.” However, these increases will not be enough to replace Iraq as the second largest OPEC producer behind Saudi Arabia.
To read the article in its entirety, please go to http://www.rigzone.com/news/oil_gas/a/143162/Shale_Fightback .
