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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: Eric who wrote (189694)	3/16/2015 8:41:03 PM
From: elmatador	Read Replies (1) \| Respond to of 206143

OPEC Warns U.S. Oil Boom Could Be Over by Year-End Forecast contrary to energy watchdog IEA report that sees U.S. production growing through 2020 OPEC said Monday the U.S. oil boom could be over by the end of this year, offering a pessimistic view of American producers’ ability to withstand a historic collapse in crude prices and predicting that global petroleum supplies would realign with demand. The cartel, in its closely watched monthly oil-market report, cited spending cuts by U.S. producers and the falling number of American rigs drilling for oil in recent months after crude prices fell by about 60% from last summer to January before rallying in February. For instance, rig counts fell faster in February than they did in January, according to the latest Baker Hughes report The Organization of the Petroleum Exporting Countries report comes when oil markets are at a crossroads and demonstrates the uncertainty over the staying power of the American oil boom. Just last week, the International Energy Agency said that American producers were defying expectations and that their continued production could cause crude prices to slump again. U.S. producers say they have developed techniques to pump crude more quickly, and on drilling wells while holding off on hydraulic fracturing, or fracking until prices make operations more viable. Total U.S. crude production hit a record high of 9.4 million barrels a day last week. But OPEC stuck to its view that American oil is more expensive to produce and vulnerable to crude prices that have fallen below $45 a barrel for Nymex futures contracts in recent days. “As drilling subsides due to high costs and a potentially sustained low oil price, a drop in production can be expected to follow, possibly by late 2015,” the cartel’s report said of American production. The organization had previously said production of U.S. oil would start falling in 2018. By contrast, the IEA, in its medium-term oil market report published last month, predicted U.S. oil production will continue growing through 2020, amid increased productivity from hydraulic fracturing, or fracking, of underground shale formations. The diverging views show how much difficulty oil-industry prognosticators like the IEA and OPEC are having during this market slump. “It is an experiment. Nobody has a clue,” said Olivier Jakob, managing director at Swiss-based consultancy Petromatrix GmbH in Zug, Switzerland. The report provides support for OPEC’s decision last November to maintain production levels in the face of collapsing prices. In the past OPEC has cut production to prop up prices, but this time, members--led by Saudi Arabia, the world’s largest exporter of crude--decided to fight for market share. The report follows optimistic statements from Saudi Arabian officials and other Persian Gulf producers about the price of oil “stabilizing” in recent weeks. On Sunday, Ibrahim al-Muhanna, a top adviser to Saudi Arabia’s energy minister, said prices would rise as demand increased across the world. OPEC’s report raised its forecast for global oil demand by 50,000 barrels a day to 92.33 million barrels a day. And it cut its prediction for overall U.S. oil production growth, saying it will only rise by 820,000 barrels a day this year compared with 1.61 million barrels a day in 2014. OPEC’s report said the cartel had some woes of its own and its crude production declined by 140,000 barrels a day to 30.02 million barrels a day due to disruptions in Libya and Iraq.