Wood Mackenzie has just released research showing the Organisation of the Petroleum Exporting Countries (OPEC) ‘remains key’ to price recovery through to 2040.
Wood Mackenzie has announced that although non-OPEC production is set to continue supply until 2030, OPEC will need to ‘continue to exploit’ its available resources. Recent times have seen record-breaking gains in the Permian Basin (North America), and strong demand and heightened geopolitical risk pushed Brent Oil to USD80/bbl, but according to research by Wood Mackenzie, OPEC will remain key to price recovery over the short to medium term.
Wood Mackenzie announced in their Macro Oils Long-Term Outlook H1 2018 that the US can expect ongoing strong performance. Crude and condensate production is anticipated to also reach a ‘plateau of around 11 million b/d in the mid to late-2020s’, adding 4.2 million b/d to global supply by 2025.
“Outside the US, Brazil and Canada are adding the most non-OPEC production by 2030,” commented a representative from Wood Mackenzie. “We expect total non-OPEC liquids production to lose its growth momentum and decline post-2030.”
Russia’s resource production is predicted to increase into the 2020s before it is starting to decline, according to Wood Mackenzie. Other mature provinces, such as the North Sea, are predicted to maintain output levels into the mid-2020s. New resource producers such as Guyana, Uganda and Kenya are predicted to add significant volume and help counter ‘structural declines’, from mature producers such as China and Indonesia.
Demand is expected to continue to grow through to its peak in the mid-2030s, and the oil and gas industry is urged to find increasingly expensive oil to offset declines from a maturing asset base. As reliance on the OPEC ramps up however, the importance of geopolitical risk also becomes a key determinant for both supply and prices.
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