IEA Sees No End to US Shale Output Surge


"More investments will be needed to make up for declining oil fields".

"Our meetings with the players in the financial market participants including hedge funds and oil managers are also the continuation of the meeting [with shale producers] we had previous year at CERAWeek". The United States is well positioned to supply individual US refiners with heavy crude from the Strategic Petroleum Reserve (SPR), should it find that new sanctions or internal strife means those refiners have to abandon Venezuelan heavy oil imports. It represents more than half of the total global production capacity growth of 6.4 million b/d expected by 2023. Still, the International Energy Agency's warning that OPEC production cuts will unleash a supply surge from the USA and other producers maintained a note of caution in the market.

The path to carry USA crude to world markets "looks clear", driven by expansions in Texas, said researchers in the new report. US crude production hit an all-time monthly high in November and is expected to post a yearly record in 2018, the US Energy Information Administration reported last month.

The Port of Corpus Christi's strategic goals include providing surface infrastructure and services in support of maritime and industrial development. The United States will thus be the largest global producer.

A long list of expansion projects has been proposed for the Corpus Christi region, including the newly announced Cactus II Pipeline sponsored by Plains All American Pipeline LP, which would connect Permian oil to South Texas.

After downplaying and then attacking, Opec has spent the a year ago making nice with its U.S. shale adversaries, in an effort to understand the magnitude of the problem and, perhaps, convince the rival producers to show restraint.

"We just don't export LNG; we export freedom", Perry added. In the opposite case, or in the instance where the OPEC countries were to stop cutting production, we could see a marked drop in oil prices. (The report also noted that while the USA imports $2.2 billion of steel products related to line pipe from 29 countries, it exports steel and steel products worth five times as much to those same 29 nations).

"Upstream investment may be inadequate to avoid a significant squeeze of the global spare capacity cushion by 2023", it said in a report released Monday.

In its report, the agency warned that energy companies need to start spending again to avoid potential crude oil shortages after 2020 that could lead to surging prices. With non-OPEC supply rising quickly, particularly in the U.S., OPEC may struggle to figure out a way to increase output without pushing down prices, according to the IEA's analysis.

The International Energy Agency believes slow growth from OPEC will be offset by oilfields in the U.S. The future role of oil is "widely misunderstood", Nasser said Tuesday, emphasizing that oil demand globally remains healthy. "However, I don't believe that this strength will be long-lived with rising USA production and a strengthening dollar", said Phillip Streible, senior market strategist at RJO Futures in Chicago. At the same time, the producers worked to lower their costs. Boosted by economic growth in Asia and a resurgent U.S. petrochemicals industry, global oil demand will increase by 6.9 million bpd by 2023 to 104.7 million, according to the IEA.

The news comes at a tense time for global trade.

Last year, the IEA forecast U.S. shale production to grow by 1.4 million bpd by 2022 with oil prices of up to $60 a barrel and by up to 3 million barrels with oil at $80 a barrel. The global benchmark traded at a $3.08 premium to May WTI.



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