The recent surge in North American oil production is set to send “shockwaves” through global oil markets, and likely stymie demand growth for OPEC crude over the coming five years, the OECD’s Paris-based energy watchdog the International Energy Agency (IEA) said in its latest six-monthly Medium-Term Oil Market Report (MTOMR), published on 14 May. Led by US light tight oil (LTO) and Canadian oil sands, its effects are expected to be as transformative to the market as the rise of Chinese demand has been since the early 2000s.
Regional supply-side contrasts identified in last October’s MTOMR have become even more pronounced since the start of this year, the IEA said, as incremental North American output has increased in prominence. The forecast for non-OPEC supply growth has now been adjusted upwards, with the IEA expecting it to grow by 6mn b/d to 59.3mn b/d in 2018. Approximately 65% of this growth – 3.9mn b/d – is projected to come from North American LTO and Canadian oil sands production. (CONTINUED - 943 WORDS)