Crude prices will advance to $128 a barrel by 2035 with a 16 percent increase in consumption supporting the development of so-called tight oil in the U.S. and a tripling in output from Brazil, the International Energy Agency said today in its annual World Energy Outlook. The role of the Organization of Petroleum Exporting Countries will recover in the middle of the next decade as other nations struggle to repeat North America’s success with exploiting shale deposits, the agency predicted.
“As production goes up and imports go down, it does have positive macroeconomic effects for the U.S.,” said Mike Wittner, head of oil research at Societe Generale SA in New York. “It’s good for the balance of payments, good for the dollar, good for jobs, for other heavy industries. But it doesn’t equate to being insulated from world oil markets.”
Soaring shale output in the U.S. is helping the world’s largest oil consumer achieve its highest level of energy independence in two decades, cushioning it against disruptions in Africa and the Middle East. The boom threatens revenues for OPEC’s 12 members, whose production is at its lowest in two years amid political unrest in Libya and theft in Nigeria.
US oil production will rise to 11.6 million barrels a day in 2020, from 9.2 million in 2012, as it taps rock and shale layers in North Dakota and Texas with the use of horizontal drilling and hydraulic fracturing, according to the IEA, a Paris-based adviser to 28 energy-consuming nations. The report didn’t specify an output level for 2015.
Published: December 11, 2013