The International Energy Agency Suggests Oil Supply Risks

According to the International Energy Agency (IEA), a new report expects that benefited from the global economic recovery, global oil demand will reach 92.76 million barrels per day on average in 2014, which is 0.96 million higher than expected number in May, 2013. At the same time, the demand will grow by 1.42 million barrels per day next year.

 

The oil demand is increasing, as well as the supply risk. The IEA said current oil market has become more nervous. It mentioned the supply sources risk brought by unrest situation in Iraq and Libya, sanctions against Iran, and oil theft in Nigeria, particularly the risk of Iraq.

 

Currently, Iraq is OPEC's second-largest oil producer. Its oil production reached 3.6 million barrels per day in February, the peak amount in 35 years. Iraq also plans to reach the target of 4 million barrels this year.

 

The IEA also expects that the global promotion of shale oil and gas production is likely to appear before 2020, earlier than previous estimation. The agency forecasts that shale or light oil supply can reach 650 thousand barrels per day outside the United States by 2019, including 390 thousand barrels from Canada, 100 thousand barrels from Russia and 90 thousand barrels from Argentina. By that time, America's shale oil production is expected to achieve double growth, to 5 million barrels per day.

 

Experts believe that the global economic recovery and continued turmoil in oil-producing areas will support high oil prices and stimulate the exploration of oil & gas and the development of unconventional energy, such as shale gas.