USA to dominate oil and gas markets 'for decades to come'

US on the cusp of history's biggest oil and gas boom, IEA forecasts

While OPEC in their monthly report expects to see a larger oil supply deficit in 2018, the International Energy Agency (IEA) sees the appetite and an oil market oversupplied in the first half of 2018.

"Oil is already facing stiff competition from ever-cheaper and more environmentally friendly energy sources as traditional fossil fuel users switch to cleaner, low-carbon alternatives", IEA said in its World Energy Outlook 2018.

"The oil market should be able to find a longer-term equilibrium, with the oil price in a range of $50-70 a barrel", the agency said.

Some ministers for the Organization of Petroleum Exporting Countries said an extension of an agreement that sidelines about 2 percent of the total global demand for oil in an effort to balance the market was necessary next year.

It seems that OPEC and the International Energy Agency live in different worlds when it comes to projecting future energy demand.

"The scenario would see demand grow from 95.4 million barrels per day, in 2016, to reach 111.1 million barrels per day by 2040, with the global economy growing by an average of 3.5 per cent per year during that time".

"Yet this is precisely what is happening as a result of the USA shale revolution - both for oil and for natural gas", the IEA said.

Oil markets were treading water early on Tuesday, continuing the cautious trading seen over the last week as bullish factors such as ongoing OPEC-led production cuts and Middle East tensions are countered by rising USA output.

The IEA said planned and unplanned disruptions from OPEC may be offset elsewhere, however.

The United States can look forward to many more years of an unprecedented oil and gas boom.

But the price crash had another effect: it forced a wave of innovation that has improved shale producers' productivity and efficiency. Forecasts for shale-oil output in 2025 were bolstered by 34 per cent to 9 million barrels a day. The country is expected to account for 80 per cent of the increase in global supply over the same period.

Between 2017 and 2040 the IEA estimates that more solar power capacity will be added globally each year than any other source of energy, with an annual average increase of almost 70 gigawatts.

"Electric vehicles are in the fast lane as a result of government support and declining battery costs, but it is far too early to write the obituary of oil as growth for trucks, aviation, petrochemicals, shipping, and aviation keep pushing demand higher".

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