Posted on 05/12/2015 4:25:20 AM PDT by thackney
The Organization of the Petroleum Exporting Countries doesn’t see oil prices consistently trading at $100 a barrel again in the next decade, a pessimistic assessment that has the group considering the return of production limits to influence the market, according to people familiar with a recent strategy report.
The report predicted that oil prices will be about $76 a barrel in 2025 in OPEC’s most optimistic scenario, the people said, a reflection of the cartel’s worries that American competitors will be able to cope with low prices and keep pumping out supplies. It also contemplated situations where crude oil costs below $40 a barrel in 2025, the people said.
A price of “$100 is not in any of the scenarios,” said a delegate at the OPEC strategy presentation last week in Vienna.
OPEC has been grappling with how to respond to a historic price crash caused in part by a surge in American supplies, thanks to hydraulic fracturing of shale formations deep underground. Normally, the cartel cuts its own production to reduce supplies, and thereby pump up prices, in times of market turbulence, but last year the group decided that wouldn’t work.
Instead, some OPEC nations, notably Saudi Arabia, have flooded the market with more crude and cut prices in hopes of keeping customers. In turn, OPEC officials have said the low-price environment could push out some expensive-to-produce oil, such as that from American frackers, whose costs are high.
Oil prices have rebounded in recent months, but many market watchers say the rally is likely to sputter. Monday, prices slipped as the U.S. dollar strengthened and investors eyed indications of weak demand. A stronger dollar makes oil more expensive for buyers outside of the U.S., potentially suppressing global demand.
(Excerpt) Read more at wsj.com ...
I thought the world was supposed to run out of oil by now?
Turns out it was just running out of cheap oil.
Interesting...
Are they also factoring monetary inflation into their ‘estimates’. If so then oil per barrel when compared to early to mid twentieth century prices is fantastically low.
And the Persian Gulf oil states have yet to apply the new gas/fluid injection technology that could tremendously extend the life of many oilfields. Once the injection technology comes into use there, they could extract oil at current production rates for possibly 80 years or more.
You may be surprised at what is already used. Secondary and Tertiary recovery methods have been used their for many years.
For example:
Ghawar: The Arabian Granddaddy
http://www.epmag.com/ghawar-arabian-granddaddy-775846#p=4
Gas injection was introduced in 1958, according to “Hydrocarbons Technology,” and water injection began in 1964 to provide pressure support. Today water is pumped by pipeline from the Qurayyah Seawater Treatment Plant.
In 1995 Aramco conducted a 3-D seismic survey to examine the reservoir structure and fracture distribution to guide future development of the field. More recently the company began the Haradh III project, which relies on maximum-reservoir-contact wells and downhole interval control valves for flow control. Geosteering also has been used, and wells have been equipped with intelligent sensors for continuous monitoring.
Gotcha!
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