Falling oil prices bring fear of supply shock: CERA
Posted by Big Gav in peak oil
Marketwatch reports that CERA and OPEC are predicting an oil supply shortfall in future years due to falling investment in new production and depletion of existing fields - Falling oil prices bring fear of supply shock: CERA. I'd agree with this except CERA's statements are such a reliable contrarian indicator that I'm worried now I've got it completely wrong.
The collapse in oil prices and reductions in production investment could cut the growth in oil supply by nearly eight million barrels a day in the next five years, according to a report released on Friday by Cambridge Energy Research Associates.
About 7.6 million barrels per day out of total potential future growth of 14.5 million barrels per day from 2009 to 2014 are "at risk," according to the energy research firm's report, the Long Aftershock.
If all "at risk" supply fails to materialize, world oil production capacity five years from now could reach 101.4 million barrels a day, down from the pre-collapse CERA projection of 109 million.
The steep decline in oil prices has not been matched by an equal decline in the cost of developing new oil fields. This means new production projects could be "slowed down, postponed, or cancelled altogether," CERA said in a news release. ...
CERA's view has been echoed by the Organization of Petroleum Exporting Countries, which controls about a third of the world's oil production. OPEC has warned of a possible price shock when oil demand picks up in coming years while supply remains weak. It's also said as many as 35 OPEC's new projects may be delayed by 2013
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