Oil supply expected to outpace demand

June 24, 2014 | By Barbara Vergetis Lundin

In mid-June, the International Energy Administration (IEA) released its Medium-Term Oil Market Report. Rystad Energy, an independent oil and gas consulting services and business intelligence data firm, has compared the revised IEA demand outlook with supply estimates derived from its global upstream database and bottom-up analysis of 30,000 fields and 2,500 oil companies in 150 countries.

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The Rystad Energy analysis shows that oil markets have gradually tightened over the last two years, while the outlook indicates a possible inflection point early 2015 and an increasing downward pressure on oil prices for the next two to three years.

The recent geopolitical outages of oil production from the Middle East and North Africa have until now been balanced by the increased supply of unconventional tight oil from the United States, according to Rystad. This predicted easing of the oil markets is partly driven by an assumption of gradual return over the next two years of oil from Libya, Iran, Iraq and Sudan, Rystad says, while U.S. drillers are continuing their activities with unchanged intensity and increased efficiency.

North American tight liquids production will surpass 10 million barrels before 2020, Rystad Energy predicts, making North America a net exporter of seaborne crude and petroleum products by 2017.

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