Thread: OPEC Warns On Risks To U.S. Production Growth

OPEC Warns on Risks to U.S. Production Growth | Fox Business
OPEC Warns on Risks to U.S. Production Growth

Published February 12, 2013
Dow Jones Newswires

• 
  Reuters

LONDON – The Organization of Petroleum Exporting Countries Tuesday warned that expectations of growth in non-OPEC oil supply this year--seen as essential to meeting global oil demand in the long term--were subject to a high level of risk, particularly in the U.S.
Strong growth in U.S. oil output in recent years as a result of technologies that have made it possible to release large reserves of oil trapped in shale rock has taken many by surprise and started a shift in global trading patterns that could threaten OPEC's dominance of the oil market.
In a landmark study this October, the International Energy Agency predicted U.S. oil output could, by 2020, overtake that of OPEC's kingpin, Saudi Arabia. According to the IEA's forecast the increase in U.S. output will force OPEC members to adapt rapidly to changing trade patterns, and potentially even put them in competition with North American oil exports.
OPEC's response to this development has so far been muddled. The group initially said it wasn't concerned by the shale-oil boom, but later warned forecasts of rising U.S. oil production could curtail its own investment to maintain output.
Most recently, in its monthly oil market report published Tuesday, the group warned of the many stumbling blocks that could prevent U.S. oil production from meeting expectations, at least in the near term.
Although the group of major oil producers forecast the shale boom in the U.S. would help increase oil production by 520,000 barrels a day this year, making the U.S. the region with the highest production growth among the non-OPEC countries, it also warned of the challenges facing the industry.
"A high level of risk is associated with non-OPEC supply forecasts on political, price, economic, weather, environmental and geological factors," the report said.
The group projected U.S. production would rise from 10.42 million barrels a day in the first quarter of this year to 10.6 million barrels a day in the fourth quarter.
Overall, OPEC forecast that non-OPEC supply would increase by 940,000 barrels a day this year to 53.9 million barrels a day, driven primarily by growth in the U.S., Canada, Latin America and the Former Soviet Union.
The group said that it expected demand for its own crude to fall by 300,000 barrels a day in 2013 compared to last year.
Meanwhile, data provided by secondary sources showed that output from OPEC member countries declined in recent months.
Oil production by members of the group fell to its lowest level since October 2011 last month as the price for the group's oil benchmark rose to settle at $109.28 a barrel, its highest monthly average since September 2012.
The decline in production was primarily the result of lower output from Saudi Arabia, Nigeria and Algeria but was offset slightly by higher production from Angola.
(





Read more: OPEC Warns on Risks to U.S. Production Growth | Fox Business

California on the Verge of Oil Production Boom?

East West Petroleum Executive Chairman David Sidoo on the potential growth of oil production in California.


Video below.


http://video.foxbusiness.com/v/2109773340001/

Obama has no excuse to not sign on to Keystone Pipeline. Both Democrats, Republicans, Unions and the state of Nebraska is on board.
No more foreign oil. No more supporting dictatorships and human rights violators.

Time to Approve Keystone Pipeline? | Fox Business Video