WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Breaking News:

Iraq To Export 5M More Barrels In June

Alt Text

OPEC Head Calls for $65 Oil

Qatar’s Energy minister Mohammed bin…

Alt Text

Rising Oil Prices May Hit Asian Consumers

Falling oil prices in 2014…

  1. Home
  2. Energy
  3. Oil Prices
Stuart Burns By

Stuart Burns

Stuart is a writer for MetalMiner who operate the largest metals-related media site in the US according to third party ranking sites. With a preemptive…

More Info

Boom in Production of ‘Technological Barrels’ of Oil Drives Prices Down

A debate is going on in the oil industry and among its consumers about the medium- to longer-term impact of North American shale oil and Canadian tar sands on the oil price.

While oil from less conventional sources like this has flooded the market, particularly impacting North America and driving down both imports and prices, they remain technologically more complicated to extract.

Nevertheless, these technological barrels of oil are predicted to make up roughly 65% of non-OPEC oil production capacity growth until 2018, according to the IEA as quoted in the FT, while North America is forecast to make up some 40% of incremental oil production capacity growth over the next five years.

Related article: Peak Oil Price: The Latest Industry Worry

Clearly these technological barrels are looking to have a significant impact on global oil supply and prices – which, in turn, affects metal prices.

Indeed, some feel the impact will drive prices lower during this decade, Dennis Gartman, a pundit followed by many investors, is quoted in another article as saying to CNBC this week: “If there were a way to sell OPEC short, I would try to find a way to sell OPEC short.”

If that is the case, a lower oil price could have a profound impact on the global economy, boosting growth and demand for metals. In addition, the price of many energy-intensive metals like aluminium react to a fluctuating oil price – gaining support from rising oil prices and falling with lower oil prices – even though electricity is rarely produced directly from oil.

Related article: Why the High Oil Prices if Supplies Really are Abundant?

Not all are agreeing with the idea of lower oil prices, though.

The industry -has been caught between rising output and weak global demand, at least from mature markets, which has resulted in a lower oil price. However, rising production costs are prompting analysts to examine the true cost of production, particularly for new sources of “technology barrels.”

To be continued in Part Two.

By. Stuart Burns


Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News