OPEC's share of the world market will shrink in 2014 as rising supply of U.S. shale oil gives the exporter group little comfort from the fastest growth in world demand in four years.
In a monthly report, the Organization of the Petroleum Exporting Countries forecast demand for its oil in 2014 would average 29.61 million barrels per day (bpd), down 250,000 bpd from 2013 and 770,000 bpd less than it produced in June.
"This would imply a further build in global crude inventories, which currently stand at high levels," OPEC said in reference to the market outlook for next year.
The report is a further illustration that technology for extracting oil and gas from shale is reducing dependence on OPEC. Rising output will make it harder for the 12-member group to keep its own output at high rates without risking a drop in prices below $100 a barrel, its preferred level.
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The more shale oil we pump the more the Saudis and Russians have to compete for the rest of the world market. Then the less money either will make and the less trouble they can stir up.
ReplyDeleteGood point.
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