OSLO – OPEC countries, which are meeting next week to discuss their level of oil output, should make the right decision for the global economy, which remains “very fragile”, the head of the International Energy Agency told Reuters on Tuesday.
Source: Reuters
“It is up to OPEC countries to decide, but what I see is that the pressure is strong on the OPEC plus Russia, as a result of the strong growth coming from the non-OPEC countries – the U.S., Brazil, Norway, Guyana and others,” Fatih Birol said in an interview on the sidelines of an energy conference in Oslo.
“There will be lots of oil in the markets. I hope they will make the right decision for themselves and for the global economy, which is still very fragile.”
Overall, he expected oil supply to be plentiful, the result of demand slowing due to weaker economic growth, especially in China.
Turning to the United States, Birol said he expected production growth in the shale oil sector to slow from previous “explosive” levels, he said, due to the financial difficulties of some of U.S. shale producers, not because shale resources were depleting.
“It will come this year, next year… It will slow down,” Birol said. “I don’t expect a decline at all as things stand now but I expect that there will be a slowdown in the growth.”
Still, most of the added oil production growth will come from the United States in the years ahead.
“We will not be seeing the explosive growth in the U.S. shale production, but we are still expecting growth coming from the United States, not only from shale, from the Gulf of Mexico (too),” he said.
“The U.S. will be the dominant country in terms of where the oil production growth comes from in the next five years.”
