United States oil and gas 'resurgence' expected as global demand grows

US oil and gas 'resurgence' expected as global demand grows

US oil and gas 'resurgence' expected as global demand grows

"The US will become the undisputed global oil and gas leader for decades to come", said Fatih Birol, IEA executive director.

The forecasts are also underpinned by some major assumptions: The report assumes that governments stick to promises they've made on energy, including pledges by India and China to move away from fossil fuels. But analysts expect the price to not rise much further in coming months as the USA ramps up production.

"Meeting this demand would require an overall investment of around $10.5 trillion across upstream, midstream and downstream operations" Opec Secretary-General, Mohammad Barkindo, said noting that the 2017 outlook was more positive than past year, partly thanks to oil exporting nations' efforts to stabilise the market. Oil inventories in the world's richest nations fell by 40 million barrels in September, breaking below 3.0 billion barrels for the first time in two years, driven in part by Hurricane Harvey, which shuttered much US refining capacity in August. If the standards stay at today's levels, the US would remain a net oil importer in 2040.

The International Energy Agency estimates that consumption of petroleum will shrink in Brazil – to 3.15 million barrels per day in 2018 – as well as worldwide.

Some analysts even predict that with oil demand declining as EVs set to replace conventional fuel vehicles, oil price could plunge to as low as $10 a barrel over the next six to eight years.

Total energy demand is expected to have grown by 30 percent by 2040 — and would be growing twice that without efforts to improve energy efficiencies.

Elsewhere, Canadian shale gas development will be a casualty of rapidly rising USA production - not only delaying plans for offshore exports but even curtailing supply to its traditional market south of the border.

That will keep prices down and help make the United States a net exporter of oil - in addition to gas - by the late 2020s.

"Using a scenario whereby current levels of OPEC production are maintained, the oil market faces a hard challenge in 1Q18 with supply expected to exceed demand by 600,000 bpd followed by another, smaller, surplus of 200,000 bpd in 2Q18", the agency said. However, this is expected to cut only 2.5 million barrels per day (bpd), or about two per cent, off global oil demand by that time.

"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said.

The U.S. shale surge could also mean an era of lower-for-longer oil prices.

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