IEA SAYS OIL PRICES WILL REMAIN LOW UNTIL 2020
11 FEB 2015
The International Energy Agency predicts that American energy will remain in the game for at least another five years and as a result oil prices will remain below their traditional level over the period, Alex Lawler of Reuters reports. “ 'The United States will remain the world's top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth...The agency also said in its Medium Term Oil Market report that oil prices, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years. Oil prices deepened their decline after the Organization of the Petroleum Exporting Countries in November shifted strategy and declined to cut its own output, choosing to retain market share that has been eroded by rival supply sources such as US shale oil. But IEA Executive Director Maria van der Hoeven, launching the report in London, said while OPEC may win back some customers while prices are low, it would not regain the market share it held before the 2008 financial crisis. 'This unusual response to lower prices is just one more example of how shale oil has changed the market,' she said in a statement. 'OPEC's move to let the market rebalance itself is a reflection of that fact.' " The good news maybe long-term, then.
11 FEB 2015
The International Energy Agency predicts that American energy will remain in the game for at least another five years and as a result oil prices will remain below their traditional level over the period, Alex Lawler of Reuters reports. “ 'The United States will remain the world's top source of oil supply growth up to 2020, even after the recent collapse in prices, the International Energy Agency said, defying expectations of a more dramatic slowdown in shale growth...The agency also said in its Medium Term Oil Market report that oil prices, which slid from $115 a barrel in June to a near six-year low close to $45 in January, would likely stabilize at levels substantially below the highs of the last three years. Oil prices deepened their decline after the Organization of the Petroleum Exporting Countries in November shifted strategy and declined to cut its own output, choosing to retain market share that has been eroded by rival supply sources such as US shale oil. But IEA Executive Director Maria van der Hoeven, launching the report in London, said while OPEC may win back some customers while prices are low, it would not regain the market share it held before the 2008 financial crisis. 'This unusual response to lower prices is just one more example of how shale oil has changed the market,' she said in a statement. 'OPEC's move to let the market rebalance itself is a reflection of that fact.' " The good news maybe long-term, then.