Production Growth through 2020 | Russell T. Rudy Energy LLC
“Rigzone” reports that according to International Energy Agency’s (IEA) Medium Term Oil Market Report, production in the U. S. will continue to grow throughout this decade, but at a slower rate. The IEA based this on the assumption that crude oil prices will stabilize, but at levels significantly lower than those of the last three years.
The agency predicts that the rebalancing of supply and demand in response to recent price drops will be swift, but limited in scope. Light crude oil supply from unconventional sources will grow very slowly in the short to intermediate term, but continue to grow, nonetheless.
The same cannot be said for Russia which is facing the negative trifecta of collapsing prices, trade sanctions, and currency depreciation. IEA projects Russia as being hardest hit by the current price collapse with production dropping by 560,000 barrels per day (bpd) by the end of the decade.
As non-OPEC producers cut back on production, IEA anticipates demand for OPEC oil increasing from the current level of 29.4 million bpd to 29.9 by 2020. OPEC itself forecasts demand for its oil rising significantly during 2015 and beyond as other producers are forced to cut back.
IEA expects slower growth in global demand for oil given increasingly pessimistic forecasts for economic growth. The agency currently projects growth in global demand of 910,000 bpd in 2015 and 1.13 million bpd in 2016. Lower oil prices apparently are not stimulating global economic growth, and consequently demand for crude, as many had originally expected.
To read the article in its entirety, please go to www.rigzone.com/news/article.asp?hpf=1&a_id=137149&utm .
