IEA sees US oil output surge stealing OPEC share in next 5 years

A pump jack used to help lift crude oil from a well in South Texas. US shale oil output is set to surge over the next five years according to the IEA, as US producers eat into the market share of their OPEC rivals. (Reuters)
Updated 05 March 2018

IEA sees US oil output surge stealing OPEC share in next 5 years

LONDON: US shale oil output is set to surge over the next five years stealing market share from OPEC producers and moving the country, once the world’s top oil importer, closer to self sufficiency, the International Energy Agency said on Monday.
A landmark deal in 2017 between OPEC and other oil producers including Russia to curb output to reduce global oversupply materially improved the outlook for other producers as oil prices rose sharply throughout the year, the IEA said.
As a result, US oil output has resumed sharp growth over the past year and is expected to rise by 2.7 million barrels per day (bpd) to 12.1 million bpd by 2023, as growth from shale fields more than offsets declines in conventional supply.
Natural gas liquids will add another 1 million bpd to reach 4.7 million bpd by 2023.
With total US liquids production set to reach nearly 17 million bpd in 2023, up from 13.2 million in 2017, the United States will be by far the world’s top oil liquids producer.
“The United States is set to put its stamp on global oil markets for the next five years,” Fatih Birol, the IEA’s executive director, said in a medium-term market outlook.
Oil production growth from the US, Brazil, Canada and Norway will more than meet global oil demand growth through 2020, the IEA said, adding that more investment would be needed to boost output after that.
Non-OPEC production is set to rise by 5.2 million bpd by 2023 to 63.3 million bpd with the United States alone accounting for nearly 60 percent of global supply growth.
Growth will be led by the Permian Basin in Texas and New Mexico, where output is expected to double by 2023.
“Despite talk of capital discipline and increased focus on returns rather than growth, US producers regrouped quickly when oil prices stabilized and began to rise,” the IEA said.
Production in 2017 rose by 670,000 bpd as drillers added 200 rigs “beating all expectations,” the IEA said.
Last year, the IEA forecast US 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.
By contrast, output from OPEC producers will grow at a much slower pace, the IEA said, adding it expected Venezuelan production declines to accelerate offsetting gains in Iraq.
As a result, OPEC’s crude oil capacity will grow by just 750,000 bpd by 2023.
With forecast capacity of 36.31 million bpd, OPEC will be supplying less than 35 percent of global demand by 2023 compared to its usual share of around 40 percent.
Boosted by economic growth in Asia and a resurgent US petrochemicals industry, global oil demand will increase by 6.9 million bpd by 2023 to 104.7 million, according to the IEA.
That means demand growth of around 1.1 percent per year on average.
Despite steep non-OPEC oil production gains, the IEA warned that a decline in mature fields meant more investment was needed across the globe after 2020.
“Upstream investment shows little sign of recovering from its plunge in 2015-2016, which raises concerns about whether adequate supply will be available to offset natural field declines and meet robust demand growth after 2020,” it said.


White House says Trump regrets not raising tariffs higher

US President Donald Trump arrives at the G7 summit in Biarritz, France, on Sunday. Trump had been trying to use the conference to rally global leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the US ahead of his reelection. (AP)
Updated 26 August 2019

White House says Trump regrets not raising tariffs higher

  • President’s comments appear at first to mark a rare moment of self-reflection by the US leader

TOKYO: President Donald Trump said Sunday that he had second thoughts about escalating the trade war with China, but the White House later reversed that message saying the president was misinterpreted and that his only regret in hiking tariffs is that he didn’t raise them higher. Trump faced a tense reception from world leaders meeting amid mounting anxiety of a global economic slowdown at the Group of Seven summit in France. During a breakfast meeting with British Prime Minister Boris Johnson, Trump suggested he had qualms about the spiraling conflict. “Yeah. For sure,” Trump told reporters when asked if he has second thoughts about escalating the dispute, adding he has “second thoughts about everything.”
But hours later, White House press secretary Stephanie Grisham issued a statement saying Trump’s comments about US tariffs on China were “greatly misinterpreted.”
She said Trump only responded “in the affirmative — because he regrets not raising the tariffs higher.” The comments appeared at first to mark a rare moment of self-reflection by the famously hard-nosed leader. But the later reversal fit a pattern for Trump in recoiling from statements he believes suggest weakness.

HIGHLIGHTS

• President Donald Trump faced a tense reception from world leaders meeting amid mounting anxiety of a global economic slowdown at the Group of Seven summit in France.

• White House said comments about US tariffs on China were ‘greatly misinterpreted.’

Trump had been trying to use the conference to rally global leaders to do more to stimulate their economies, as fears rise of a potential slowdown in the US ahead of his reelection. Trump’s counterparts, including Johnson, are trying to convince him to back off his trade wars with China and other countries, which they see as contributing to the economic weakening.

US-Japan agreement
Trump and Japan’s Prime Minister Shinzo Abe announced on Sunday a deal in principle on a major bilateral trade deal.
“It’s a very big transaction,” Trump said after talks with Abe on the sidelines of the G7 summit.
“Billions and billions of dollars,” he said. “It involves agriculture, it involves e-commerce. It involves many things. We’ve agreed in principle.”

Amazon fires
Also on Sunday, French President Emmanuel Macron said that world leaders at the G7 summit have agreed to help the countries affected by the huge wildfires ravaging the Amazon rainforest as soon as possible.
“We are all agreed on helping those countries which have been hit by the fires as fast as possible,” he told journalists.