© Reuters. FILE PHOTO: The OPEC logo at OPEC’s headquarters in ViennaBy Dmitry Zhdannikov
LONDON (Reuters) – A steady rise in U.S. oil output will gather pace in the next five years, OPEC said on Sunday, predicting that demand for the producer group’s crude will decline despite a growing appetite for energy fed by global economic expansion.
“Declining demand for OPEC crude is a result of strong non-OPEC supply in the 2017–2023 period, most notably from U.S. tight oil,” the Organization of the Petroleum Exporting Countries said in its long-term world oil outlook.
“The U.S. remains by far the most important source of medium-term supply growth, contributing … two-thirds of new supply, driven by surging tight oil output,” it said.
The United States has pushed oil output to record levels in recent years on the back of a shale revolution that allowed new technology to unlock reserves previously seen as uneconomic.
U.S. sanctions on OPEC members Venezuela and Iran have helped pushed oil prices () to their highest since 2014 at around $80 a barrel, also spurring U.S. producers to ramp up output.
However, high gasoline prices for U.S. consumers could create a political headache for President Donald Trump, who on Thursday called again on OPEC to boost supply.
OPEC said it had revised its growth outlook for non-OPEC crude and liquids to 2023, and was now expecting growth to be 4 million bpd higher than in last year’s report.
It said non-OPEC would produce 66.1 million bpd of crude and liquids in 2023, up from 57.5 million bpd in 2017.
The United States will increase tight oil production to 13.4 million bpd in 2023 from 7.4 million bpd in 2017, with total U.S. output reaching 20 million bpd, OPEC said.
That would make the United States, once the largest crude importer, self sufficient in oil.
As a result of these tectonic changes, demand for OPEC crude is seen declining to 31.6 million bpd in 2023 from 32.6 million in 2017.
In its 2017 report, OPEC had expected demand for its crude to be around 33 million bpd until the mid-2020s.
“Demand for OPEC crude … only reaches current
levels again in the late 2020s, when U.S. tight oil peaks. Thereafter, it should rise steadily, reaching nearly 40 million bpd by 2040,” OPEC said.
Demand for OPEC’s crude will drop in the mid-term despite a steady expansion in global oil demand.
OPEC raised its forecast for growth in global oil demand. It now sees 2020 oil consumption reaching 101.9 million bpd, up 1.2 million bpd from last year’s report.
Longer-term, oil demand is expected to increase by 14.5 million bpd to reach 111.7 million bpd by 2040, slightly higher than last year’s forecast.
In the long run, OPEC still hopes to maintain a steady share in the global oil supply balance thanks to abundant and cheap-to-extract reserves.
It said demand for its crude would rise by 7.3 million bpd to 2040 and for all its liquids by 10.5 million.
“The share of OPEC crude in the global oil supply is
expected to increase from 34 percent in 2017 to 36 percent by 2040,” it said.
Source: Investing.com
