Oil price edges lower on anticipated USA production rise

Oil market could tip out of balance on rising non-Opec production

The Paris-based IEA argued that with consumption in petrochemicals and other transportation still growing, the drop in oil demand would be at a modest pace.

Crude has climbed lately to a two-year high around $57 United States a barrel in trading in NY, although it is not seen making much larger gains due to rising USA output.

The IEA also today released its latest World Energy Outlook, in which it said global oil demand will fall modestly due to the rise in electric cars.

With big gains forecast in its output of shale oil, the United States is expected to become a net oil exporter by the mid-2020s, the IEA said, adding that the US will account for 80 per cent of the increase in the global oil supply to 2025, which will maintain near-term downward pressure on prices.

Some ministers for the Organization of Petroleum Exporting Countries said an extension of an agreement that sidelines about 2 percent of the total global demand for oil in an effort to balance the market was necessary next year.

The US government said on Monday US shale production in December would rise for a 12th consecutive month, increasing by 80,000 bpd.


The largest disruptive force to supply will be shale production in the USA - the IEA estimates U.S. crude oil will reach peak output in the 2020s of around 17m bpd.

"I think this group of committed and responsible producers came together. and I think they will continue to do what it takes to take us to the next level", he said at an worldwide oil conference.

The price of oil has risen over 30 percent since June to a two-year high of around $57 a barrel in NY trading amid evidence of stronger economic growth around the world. Venezuela depends on oil for more than 95 percent of hard currency export revenues, fuelling both social welfare programs and payment on some $60 billion of outstanding bonds. Next year, demand is seen hitting 98.9 million bpd, up 1.3 million bpd from this year.

Some analysts even predict that with oil demand declining as EVs set to replace conventional fuel vehicles, oil price could plunge to as low as $10 a barrel over the next six to eight years.

Analysts also noted that oil prices were being pressured by a global commodities selloff, led by base metals like nickel and copper, due to weaker-than-expected economic data from China.

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.

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