The North American oil boom is proving resilient despite low oil prices, producer group OPEC said in its biggest and most detailed report this year, suggesting the global oil glut could persist for another two years.
A draft report of OPEC’s long-term strategy, seen by reporters ahead of the cartel’s policy meeting in Vienna next week, forecast crude supply from rival non-OPEC producers would grow at least until 2017.
Sluggish global demand for oil means the call on OPEC’s crude is set to fall from 30 million barrels per day last year to 28.2 million in 2017, effectively leaving the group with two options — cut output from current levels of 31 million barrels per day or be prepared to tolerate depressed oil prices for much longer.
“Since June 2014, oil prices have experienced a significant reduction, reaching levels even lower than the crisis experienced in 2008, yet non-OPEC supply is still showing some growth,” the OPEC report said.
Brent crude has collapsed from US$115 per barrel in June last year due to ample supplies amid a US shale oil boom and a decision by OPEC in November last year not to cut output.
Instead the group chose to increase supply in a bid to win back market share and slow higher-cost competing producers.
However, shale oil production has proved to be more resilient than many had originally thought.
“Generally speaking, for non-OPEC fields already in production, even a severe low-price environment will not result in production cuts, since high-cost producers will always seek to cover a part of their operating costs,” the OPEC report said.
“For future non-OPEC production, only expectations of an oil price environment in the long-term below the marginal cost of production may deter substantial non-OPEC developments. Over the very long term, the economic threshold at which oil companies invest in upstream projects likely reflects their long-term oil price expectations,” it said.
It also said that since 1990, most of the forecasts concerning future non-OPEC oil supply have been pessimistic and often erroneous.
“For example, non-OPEC production was once projected to peak in the early 1990s and decline thereafter,” it said.
OPEC’s ability to cut and raise production over the past decades to balance demand has earned it a reputation of being a swing producer.
However, the long-term report suggested it is tight shale oil that is now playing this role.
“Recent structural changes in the growth patterns of non-OPEC supply as a result of the substantial contributions from North American shale plays might prove to be a turning point (eg, short lead times of the projects and higher short-term price elasticity),” the report said.
It said new and cheaper technologies in extraction of tight crude, shale gas, and oil sands would guarantee aggregate growth at 6 percent per year and contribute 45 percent of the growth in energy production to 2035.
“Improved technology, successful exploration and enhanced recovery from existing fields have enabled the world to increase its resource base to levels well above the expectations of the past... The world’s liquids resources are sufficient to meet any expected increase in demand over the next few decades,” it said.
“With plenty of oil still left in familiar locations, forecasts that the world’s reserves are drying out have given way to predictions that more oil than ever before can be found,” the report said.
By 2019, OPEC crude supply at 28.7 million barrels per day would still be lower than last year, the report said, and demand for its oil would start rising only after 2018-2019, reaching almost 40 million barrels per day by 2040.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained