Impact of the global crisis of oil supplies in the future … oil production will peak in 2020.

Experts revealed that global oil production will peak and decreases in the earlier than expected amid a collapse of investment in oil due to the global credit crunch.

 

Chief economist at the International Energy Agency, Fatih Birol said crude oil production will peak in 2020. Shows that this development “does not carry good news” for the world is still heavily dependent on oil as the British Guardian newspaper said.

 

 

The prediction came at a time when oil companies from Saudi Arabia, to Canada to reduce capital spending on new projects in response to a large extent what is happening from a drop in oil prices. Experts believe that these moves will further reduce the supply of oil in the future.

 

 

In the crucial OPEC summit held in Algeria this week is expected to move member countries to reduce production two million barrels per day, those countries had agreed in advance to reduce the amount of such since it began to collapse in oil prices since July.

 
OPEC’s attend to resolve to curb production sank in the flood of gloomy economic data in all parts of the world. The challenge now facing the Organization of Petroleum Exporting Countries is its ability to send messages about strong enough to stop the decline in crude oil prices plunged by about 68% since July.

 
The ominous news for OPEC is slowing Chinese economy and the sudden surge last week with reports of a decline in Chinese exports was in November like it did not happen seven years ago.

 
China, which is the second largest oil consumer after the United States – faces a slowdown in economic growth due to the financial crisis did not happen in twenty years, which reduces demand for exports and industrial power, which reduces demand for energy.

 
The question remains whether other oil-producing countries OPEC – which do not belong to an organization such as Russia and Norway – will deliberately reduce production. That may be resolved by Moscow Deputy Prime Minister and Minister for Russian energy to attend the next OPEC summit.

 
Some analysts compare OPEC dilemma now, their situation in the early Eighties the twentieth century, when crude oil prices helped push the stagnation in the United States and Europe. The demand for oil fell sharply as oil prices fell. It took 15 years until returned to the United States consumption levels in the eighties.

 
While many analysts argue that oil prices will remain low through next year, possibly during 2010, the market is still expected higher prices, especially with contracts to deliver oil for several years in the future.

 

Source: Guardian + Wall Street Journal

You might also like

Comments are closed.