Tight oil fundamentals look set to loosen over the coming five years, predicts OECD energy watchdog, the International Energy Agency (IEA) in its Medium-Term Oil Market Report (MTOMR), published on 12 October. But the same weaker global oil demand growth and strong non-OPEC supply projections that are poised to ease consumer concerns will likely pose a stiff challenge for OPEC producers.
Compared to last December’s MTOMR, projected global oil demand is down by some 500,000-930,000 b/d every year through to 2017, and the estimated Call on OPEC is cut from 2013 by some 600,000-900,000 b/d. The IEA has also downgraded its projections for OPEC NGL supply. And most critically for OPEC member countries, the MTOMR sees average oil import prices falling in nominal terms from $107/B this year steadily down to $89/B in 2017. While the IEA also sees OPEC capacity as rising through to 2017, in the majority of cases, this increase is by less than that projected in last December’s report. Furthermore, weak demand growth means an increasing amount of this new OPEC capacity will have to remain idle, the report shows (see table). (CONTINUED - 1296 WORDS)