There could be a reworking of oil market expectations regarding an “ample” global oil supply, Bahrain’s oil minister said Monday, despite expectations U.S. shale oil production could reach 14 million barrels per day (Mmbpd) in the next few years, Kallanish Energy reports.
Speaking at a CNBC-moderated panel at the International Petroleum Technology Conference (IPTC) in Saudi Arabia, Bahrain oil minister Sheikh Mohammed bin Khalifa Al Khalifa said an abundant supply of oil, primarily due to U.S. shale production, might not be so reliable moving through 2020.
“Going forward, all eyes are on U.S. production again, if there’s going to be an extra million barrels (of production a day), yes, this will suppress oil prices but the current indicators of rig counts … are telling you that maybe that is going to be a challenge,” he told CNBC.
Al Khalifa cautioned there had been few major oil discoveries recently and investment was ebbing. “So we are challenged, I think the future is challenged in terms of supply, more than people expect today,” he said.
“We can see that investments are not as bold as they once were, then perhaps that inflection point isn’t that far away,” Al Khalifa added. At that point, he said the challenge would be making sure that other producers “can meet the demand that keeps rising.”
The U.S. Energy Information Administration expects American oil production will average 13.2 Mmbpd in 2020, an increase of 0.9 Mmbpd from the 2019 level. However, growth in supply is slowing in the last few years, with 2018 growth of 1.6 Mmbpd and 2019 growth of 1.3 Mmbpd.
Brent crude is trading around the $65 a barrel mark, while West Texas Intermediate is trading just below the $60/Bbl level. Prices have been fairly stable since oil producer group Opec+, which includes most Opec members along with 10 non-Opec producers led by Russia, but its own production to limit supply and rebalance global oil prices.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said while Opec kept an eye on U.S. shale oil inventories, he was more concerned producers worked together so the energy market ecosystem was not undermined.
ExxonMobil CEO Darren Woods, who was also on the panel, believe the challenge he saw on the supply side of the market was the ability of oil producers to produce efficiently despite volatility in the market.
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