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Oil prices trading lower as IEA predicts oversupply to 2015
Published on June 24, 2010 by oilprices · 2 CommentsOil prices are trading lower on Thursday as the IEA predicts that world crude oil markets are set to remain oversupplied until 2015, the IEA stated in its annual medium term outlook report “comfortable spare capacity” for oil commodities.
The overall tone of the report contrasted with earlier years, when the western countries’ energy watchdog had warned about potential shortages. Nonetheless, it said: “We should not be complacent. Developing new supplies of oil and gas is in general a long term undertaking.”
In oil, the IEA revised upwards its forecast for rises in global crude consumption to 1.2m barrels a day per year, taking it by 2015 to a total of 91.9m b/d. But it also marked up its projection of global supplies in five years’ time to 96.5m b/d, leaving an ample cushion of spare capacity.
“Higher oil prices, lower costs and fledgling signs of increased upstream spending have eased some of last year’s concerns about medium term oil supply prospects,” the IEA said.
Tags: 2015, IEA, markets, oil, oil prices, oversupply, report, trading
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The IEA has been accused in the past of creating a political document, to calm markets, which bears no relation to the true state of oil reserves.
Is there any reason to think that this one will be received with any more enthusiasm?
There is certainly a huge gulf (pun intended) between what the IEA reports state and what a large number of energy analysts are now saying. Specifically that conventional oil is flat or in decline, reserves are overestimated by 30%, and we could be facing a supply crunch in the 2014 – 2017 time frame.
Time will tell who is right, but the IEA will face the wrath of consumers if it turns out to be wrong.
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A total exhaust is predicted in around 2050, calculated on a current consumption rate (suggesting there are no major discoveries left, and I guess there won’t). I guess GreyBrother is very close. 2017-2020 is the extreme date for a counterpoint of no return. Transformation is sometimes postponed after yet another crisis-market-correction of the EU or US banks, which will only make the market bounce worse, as it will strike. This will be beyond any correction. Economy has always been about extraction of resources, and it always seemed such a logical contradiction with ecology. Postponing the inevitable is our nature, a kind of laziness until there is no return. When it has come too far, we suffer in a forced transition, forsaking our lack of vision. Only than a real revolution happens. Spreading optimism is a first stage, as what happens now. Am I too much a pessimist? I hope so.