Reuters: IEA warns of oil 'supply crunch' by 2020 with no capex renaissance
Global oil supply may struggle to match demand after 2020, when the pinch of a two-year decline in investment in new production could leave spare capacity at a 14-year low and send prices sharply higher, the International Energy Agency said on Monday.
Investors generally are not betting on a sharp rise in the price of crude oil any time soon, but the contraction in global spending in 2015 and 2016 and growing global demand means the world could well face a "supply crunch" if new projects are not soon given the go-ahead, the IEA said in its five-year "Oil 2017" market analysis and forecast report.
Most supply growth is expected to come from the United States, where the IEA said shale, or light tight output (LTO), will grow by 1.4 million barrels per day by 2022 even if prices remain close to current levels $60 a barrel and the response from the production side could be stronger still if prices rise.
Copyright March 06, 2017, Mike Shiloh, Texas Energy Report LLC, www.texasenergyreport.com, All rights are reserved