IEA sees American energy dominance squeezing OPEC into 2020s

IEA sees American energy dominance squeezing OPEC into 2020s

IEA sees American energy dominance squeezing OPEC into 2020s

US oil majors, however, cannot engage in supply restrictions to affect the price as the OPEC cartel does, and some ministers on Monday played down the idea that the growth of shale could not be handled.

The forecast kick-starts the annual CERAWeek conference, a gathering of thousands of oil executives, traders, bankers and investors in Houston. Exxon Mobil Corp, Chevron Corp and Royal Dutch Shell Plc have large US shale operations and also operate in Nigeria. Russian Federation pumps about 11 million barrels of oil each day.

The International Energy Agency (IEA) on Monday revised U.S. oil output growth up sharply, saying the country would produce a total of nearly 17-million barrels a day in 2023, up from 13.2-million past year, eating into Opec's market share and moving closer to self-sufficiency.

Yet the strategy has also backfired by unleashing "a new wave of growth from the U.S." that leaves little space for OPEC to increase output once the cuts expire at the end of the year, according to the agency's report. It was adopted last winter by OPEC, Russia, and nine other global producers.

"Global economic growth is lifting more people into the middle class in developing countries and higher incomes mean sharply rising demand for consumer goods and services", the IEA said.

The world's largest oil producers appealed to USA shale producers to join their efforts to hold global prices at their current level at a major energy conference Monday, as the boom in shale is continuing to undermine OPEC's production curbs.

OPEC and other major producers agreed to cut combined output by about 1.8 million bpd to drain a global oil glut. Global oil trade routes are moving East, as China and India replace the United States as top oil importers.

Natural gas liquids will add another 1 million barrels per day to reach 4.7 million barrels per day by 2023.

USA crude oil production has already risen past that of top exporter Saudi Arabia, to 10.28-million barrels a day. At the same time, growth in gasoline and diesel usage will be held back by fuel efficiency improvements and declining consumption in the developed world, the IEA said.

The IAE report projects supply reductions by OPEC and foresees a 2 percent decline by 2023, as modest gains in Iran and Iraq are offset by reductions in Venezuela.

The country's light oil price was reported $65.72 on average since the beginning of 2018.

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