OPEC Secretary-General Abdalla el-Badri said oil supplies from North America “will play an important role in the coming few years,” but he cast doubt on their sustainability over the long term.
Speaking May 15 in Moscow, el-Badri acknowledged that oil supply from producers outside of OPEC are expected to increase by more than 4 million barrels per day (bpd) between 2013 and 2018, with much of that coming from North America. But he cautioned that the addition of non-OPEC oil supplies to the global market “should be viewed as a periodic shift."
"Tight oil adds depth and diversity to the market," he said. "But questions remain over its sustainability in the long-term."
Much of the North American oil production will come from shale, known as “tight oil.”
The U.S. Energy Information Administration (EIA) said in its monthly market report for May that total U.S. crude oil production, which averaged 7.4 million barrels per day (bpd) in 2013, is expected to increase to 8.5 million bpd in 2014 and 9.2 million bpd in 2015 -- the highest annual average level of production since 1972.
Despite talk of a North American shale revolution, el-Badri said, the global marketplace should be careful about what that really means. "It is essential that we put things into some context, and examine the market over all timeframes," he said.
Although North American production is expected to increase through 2018, a decline is expected after that.
El-Badri said that drop off in production is already being felt. “Many tight oil wells are experiencing sharp decline rates, which means that operators need to drill, drill, drill just to maintain production.”
The EIA has also raised its expectations for global oil demand growth, predicting that world consumption should grow by 1.2 million bpd for both 2014 and 2015. Global consumption averaged 90.4 million bpd last year.
El-Badri said there are adequate oil stocks and spare capacity to meet the expected growth in demand. Production from the 12-member cartel, he said, is close to 30 million bpd.
"This is what is required by the market," he said. "OPEC is making sure its consumers’ needs are being met."
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Canada counts the United States as its top destination for crude oil. The United States, for its part, has placed limits on how much crude oil it can export because of legislation enacted in response to the Arab oil embargo in the 1970s. That means much of the North American energy market is isolated from OPEC, which is reflected in the cartel’s 900,000 bpd crude oil production decline in 2013.
By Daniel J. Graeber of Oilprice.com
In March 1995, an all-arab coup against Saddam Husein was cancelled by a Nixon-Kissinger leftover in President Wiliam Clinton's bi-partisan administration. Following that, the sanctions against various countries in the Middle East and the hate-crimes against Arabs, has resulted in Americans, who are ignorant, paying higher prices for food, clothing and shelter. At the international level, Europe and the rest of the world have more information about the impact, past and future, than the American taxpayers who will pay for the unnecessary wars in the Middle East.
For your reading: public domain - the Body of Secrets by James Bamford available in paperback since 2002. Chapter 7 details the USS Liberty incident and the Afterword details the horrifying events of September 11, 2001. I am not on contract with any agency of any government, but have lost everything for which I ever worked attempting to go public with what I know.
This article was a waste of electrons. I hope no one paid the writer for his 'effort'.