OPEC Depressed: U.S. Shale Oil Boom To Cut Into Its Market Share
The Organization of the Petroleum Exporting Countries cut demand for its crude this year, citing growing production of U.S. shale oil, potentially putting the group on track to have its lowest share of the global oil market in more than 10 years.
This comes as industry experts increasingly question whether the producers group, which has had a decisive influence on the oil market since the 1970s, can maintain its position amid a boom in oil production in the U.S. thanks to the introduction of shale rock drilling technology.
Senior figures in OPEC initially played down the threat of the shale oil boom, but in its most recent oil market report, published Tuesday, OPEC said expected increases in North American oil production would trim another 100,000 barrels a day from the forecast demand for its crude this year, putting it 350,000 barrels a day below its level in 2012.
According to calculations by The Wall Street Journal based on historical data and the current forecasts from OPEC reports, if the group only pumps enough to satisfy demand for its crude this year, it would be supplying 33.1% of expected oil demand this year, down from 35% in 2012 and the lowest level in 11 years.
Demand for OPEC’s own oil is now expected to fall to 29.7 million barrels a day in 2013, compared with 30.1 million barrels a day in 2012, the group said.