OPEC, supplier of 40% of the world’s oil, cut forecasts for the amount of crude it will need to supply for most of the next two decades as the shale-energy boom in the U.S. lessens dependency on the group.
Bloomberg reports demand for crude from the Organization of Petroleum Exporting Countries may fall to a 14-year low of 28.2 million barrels a day in 2017, according to the group’s annual World Oil Outlook. That’s 600,000 a day less than last year’s report and 800,000 below the amount required this year. OPEC lowered every forecast for its crude through 2035 except next year, which will be higher than previously predicted. Still, Secretary-General Abdalla El-Badri predicts prices will rebound next year.
The group’s members face mounting competition in the U.S., where technological breakthroughs—hydraulic fracturing and horizontal drilling—have caused a surge in domestic production. Oil prices slumped into a bear market last month amid speculation OPEC won’t do enough to tackle a glut when it meets on Nov. 27 to discuss output.
The biggest reduction in OPEC’s long-term demand forecasts for its crude from last year’s report was for 2030. Buyers are expected to need 33 million barrels a day that year, down from the 34.8 million that it estimated a year ago.
OPEC raised its forecast for combined supplies from the U.S. and Canada for each year in its “medium-term” outlook from 2013 to 2018. It boosted the 2018 estimate by 2.2 million barrels a day to 19.1 million, and introduced a 2019 prediction of 19.4 million barrels a day. Read the full story.
