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UPDATE 1-BP's 2035 outlook sees OPEC oil gaining ground as U.S. shale slows

Tue, 17th Feb 2015 16:35

* Demand for OPEC oil to remain under pressure near term

* OPEC to regain share, exceed historic levels by 2030

* China to become top oil consumer by 2035 (Adds quotes)

By Ron Bousso

LONDON, Feb 17 (Reuters) - OPEC will regain ground andexceed its historic record production levels by 2030 as U.S.shale oil growth flattens out in the coming years, energycompany BP said on Tuesday.

In the near term, demand for oil from the Organization ofthe Petroleum Exporting Countries (OPEC) is likely to remainunder pressure as U.S. shale oil production remains strong, BPsaid in its annual benchmark Energy Outlook 2035.

Production of tight or shale oil in the United States hasbeen the main driver in supply growth that prompted the nearhalving of oil prices since July as OPEC opted not tocut its own production.

"The current weakness in the oil market, which stems inlarge part from strong growth in tight oil production in theU.S., is likely to take several years to work through," BP said.

"But further out, the growth in tight oil is likely to slowand Middle East production will gain ground once more."

After reaching its highest annual production growth of 1.5million barrels per day (bpd) in 2014, U.S. shale output isexpected to rise by about 3 million bpd between 2013 and 2035,BP said.

While OPEC's response to the reduced demand for its oilremains a key uncertainty, slower U.S. shale output and higherglobal demand will lead to an increase in demand for OPEC oil,which is expected to exceed its historic 2007 high of 32 millionbpd by 2030.

OPEC's market share by 2035 is set to reach 40 percent,similar to its average over the past 20 years.

"OPEC remains a central force in the oil market for the next20 years," BP chief economist Spencer Dale said.

Global oil and liquids supplies are expected to expand by 20million bpd by 2035, with North American production forecast tolead global supply growth until 2020, rising by 9 million bpd by2035.

Middle East production will expand after that, increasing by5 million bpd over that period, BP said.

CHINA TAKES LEAD

In its report, BP also cut its 2035 oil demand growthforecast to 37 percent from last year's 41 percent, projecting aslowdown in the expansion rate of developing Asian economiessuch as China and India from 7 percent since 2000 to 2.5 percentbetween 2013 and 2035.

Global demand for oil and other liquids such as biodiesel isprojected to rise by around 19 million bpd to reach 111 millionbpd in 2035, BP said.

China remains the largest contributor to world demand growthand will replace the United States as the world's top oilconsumer by 2035.

At the same time, increased U.S. oil production and lowerdemand for energy will lead the United States to becomeself-sufficient by the 2030s, BP said. (Editing by Jane Merriman/Ruth Pitchford)

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Comments and questions to newsroom@alliancenews.com
  
A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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A full 21-day events calendar is provided each day with a subscription to Alliance News UK Professional.
  
Copyright 2024 Alliance News Ltd. All Rights Reserved.

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