OPEC has formed a committee to analyze the impact on the market of the oil production from the operation of U.S. shale deposits, recognizing the concerns of some of the member states.
“It is a concern. The committee will consider the effect of shale oil on the global market for OPEC crude in the not-too-distant future, said yesterday Nigerian Petroleum Minister Diezani Alison-Madueke after the session of the Organization of Petroleum Exporting Countries.
Success of U.S. oil extraction by hydraulic fracturing and horizontal drilling techniques has reduced U.S. imports from some OPEC member states, particularly those in Africa, which extract lighter grades of oil, similar to that of North America.
In early May, the U.S. produced 7.37 million barrels of oil per day, up 20% over from the same period last year and the most since February 1992, according to U.S. Energy Information Administration (EIA). U.S. oil imports from Angola fell in March to 85,000 barrels per day, the lowest level since 1993. Acquisitions from Nigeria dropped in February to 194,000 barrels per day, minimum of the last 19 years. Increased competition from the U.S. means that African countries must begin to look inward and create alternative markets.
“Asia has always been an alternate market. Asia will still have growing energy needs for quite a while to come, but remember that China itself may be discovering shale gas pretty soon,” said Alison-Madueke.
OPEC members such as Libya, Algeria and Iran are not concerned about the impact of shale oil on the global oil demand and Saudi Arabian Oil Minister, Ali Al-Naimi, said that this is only another source absorbed by the market, as was with the oil from North Sea, Brazil and Russia.
Five months ago, Secretary General of OPEC, Abdalla el-Badri, said that the organization is not worried, but meanwhile he has changed his position.
“We are studying it very carefully, how much this will affect OPEC supply. Maybe the Americans will increase by 1 million and somebody else will decrease by 1 million, so we have to know at the end of the day the non-OPEC supply; it’s not only the American supply. We get different numbers about shale oil, we are trying to get more accurate information,” el-Badri said yesterday.
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