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Ah, just what a bunch of V8-starved Americans need to hear.

An International Energy Agency (IEA) report released last week says that the combination of weak global economies, increased oil supply from the Americas and better extraction technology will make oil "somewhat less tight over the medium term than it has been through most of the last decade."

The IEA, in its annual "medium term" report that forecasts supply and demand conditions for the next five years of so, also said oil demand from non-Organisation for Economic Co-operation and Development (OECD) countries (i.e., non-Western world nations) will overtake the demand from OECD nations as early as 2014 because of growing economies in Asia Pacific and the former Soviet countries. Even with this increase, OPEC may have "spare capacity," the report says.

Check out a synopsis of the report below. Then, you know, go burn a set of tires in celebration.
Show full PR text
Global map of oil refining and trade to be redrawn over next 5 years, IEA report says

12 October 2012

Profound shifts in the regional distribution of oil demand and supply growth will redefine the refining industry and transform global oil trade over the next five years, the International Energy Agency (IEA) says in its annual Medium-Term Oil Market Report (MTOMR) released today. The IEA expects the global oil market to become somewhat less tight over the medium term than it has been through most of the last decade, as a combination of demand and supply factors will cause OPEC spare capacity to return to more comfortable levels. But it also highlights elevated supply and demand risks.

The MTOMR is the last in a series of medium-term forecasts that the IEA devotes to each of the four main primary energy sources: oil, gas, coal and renewable energy. A companion to the IEA's authoritative monthly Oil Market Report, the MTOMR offers a bridge between that monthly snapshot of market conditions and the oil section of the annual World Energy Outlook, which has a longer-term focus.

"The oil market is at a crossroads," said IEA Executive Director Maria van der Hoeven. "On each and every front – technology, geopolitics, the economy – potentially game-changing developments are taking place. This report is an attempt to bring it all together and sketch out what it might all mean for the next five years. It is thought-provoking and while it cannot possibly anticipate everything the next five years have in store, we hope it will help the reader think through the issues and gain a more refined understanding of the broader context in which tomorrow's surprises will play out."

The report's projection of a return to higher OPEC spare production capacity will be welcome news amid rising supply and demand risks, she added.

Today's weak economic environment has reduced expectations of oil demand growth for the medium term, yet the reallocation of demand by region and key product, which has been underway for the last 15 to 20 years, is expected to continue. Demand from non-OECD economies is forecast to overtake that in the OECD as early as 2014. The "East of Suez" region will account for most of the growth, led by Asia, the Former Soviet Union and the Middle East. Distillate demand is also expected to growth much faster than that for other products, so that gasoil and diesel by the end of the forecast period will account for the largest share by far of the demand barrel – a challenge for refiners and end-users alike.

On the supply side, most of the growth will come from the Americas, buoyed by the transformative power of advanced extractive technologies applied to light, tight oil deposits in the US and the Canadian oil sands that has exceeded earlier expectations. Among OPEC producers, Iraq stands out as its production capacity is expected to enter a new growth phase, which may continue even beyond the forecast period. These new supply sources are expected to more than offset decline rates and outages elsewhere as well as the continued impact of international sanctions of Iran.

The report also notes a continued rebalancing of refining capacity, with expansions in Asia and the Middle East more than offsetting continued attrition in the OECD. Internationally traded crude volumes are expected to decline sharply, as rising domestic production reduces North America's import needs and more Middle East oil is kept at home to satisfy growing regional demand rather than exported. Product trade may grow in both volume and scope, however.

The report also reviews regulatory changes that will come into play in financial oil markets and surveys the most recent academic literature on oil price formation, including the relationship between oil prices and interest rates, other commodity markets and macro-economic measures such as quantitative easing.

The Medium Term Oil Market Report is for sale at the IEA bookshop. Accredited journalists who would like more information or who wish to receive a complimentary copy should contact ieapressoffice@iea.org.

About the IEA

The International Energy Agency is an autonomous organisation which works to ensure reliable, affordable and clean energy for its 28 member countries and beyond. Founded in response to the 1973/4 oil crisis, the IEA's initial role was to help countries co-ordinate a collective response to major disruptions in oil supply through the release of emergency oil stocks to the markets. While this continues to be a key aspect of its work, the IEA has evolved and expanded. It is at the heart of global dialogue on energy, providing reliable and unbiased research, statistics, analysis and recommendations.


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    • 1 Second Ago
  • 56 Comments
      Spec
      • 2 Years Ago
      The oil supply has definitely hit a plateau and should be stable for a few years. That is the good news. The bad news is that prices will remain where they are or higher because the only reason supply has increased is by spending much larger amounts of money for oil extraction with techniques like hydraulic fracturing of "tight" oil, ultra-deepwater oil in GOM, SAGD tar sands extraction, mining tar sands extraction, enhanced oil recovery, etc. Of course growth in China, India, and other parts of the developing world will keep demand strong such that prices may still slowly rise despite increased supply. You've probably notice that despite USA oil production booming of the past couple years, prices have not gone down.
        EZEE
        • 1 Month Ago
        @Spec
        No! Prices are high because of the great economy! Obama said so! :D
          EZEE
          • 1 Month Ago
          @EZEE
          It was in the debate. If you knew your own philosophy you would that Alinsky and other built lying into liberalism
          EZEE
          • 1 Month Ago
          @EZEE
          Lessons in Liberal Logic, #332 Liberals Preach Open Mindedness and Tolerance, and against stereotyping...then: Ford Future Question everything a Republican says. They all lie. Let's see...closed minded, black and white statement, stereotyping. Yep, that's a liberal.
          krona2k
          • 1 Month Ago
          @EZEE
          Did he really say that? I wonder who he thought he would be fooling if he did!
          Ford Future
          • 1 Month Ago
          @EZEE
          Question everything a Republican says. They all lie.
          EZEE
          • 1 Month Ago
          @EZEE
          Lessons in Liberal Logic #332.5 Open minded, fact based decision making. Then downvotes stuff they disagree with without any commentary on why it is wrong, even after all evident points toward the conservative being right.
      Rick
      • 1 Month Ago
      Oil won't last for long once the Chinese & India start drinking oil like the oilaholics Californians do.
      sirvixisvexed
      • 2 Years Ago
      I made a celebration tire fire. I threw some plastic in there too for good measure. I'm working on a hose that starts in the ozone layer, and sucks ozone down and dispenses it on the surface.
      goodoldgorr
      • 2 Years Ago
      On top of that someone can start a biofuel compagny selling fuels made from co2 as a feedstock. These stupid conventionnal petrol resellers let the co2 go into the air instead of keeping it and transform it into fuels. They do not flush only co2 into the air but everything included into crude oil like carbon monoxide, acids, sulfur, etc When someone buy a single gallon of gasoline then he must realized that almost 30% of the weight have been flush and burn prior of this new gallon and disposed into the air and water. This is an extremely inneficient process all this equation from petrol into the ground till a car move forward. The car manufacturers and oil compagnies change money for these inneficiencies and make huge profits. That's why there were never a real alternative, the profits are too huge for too many peoples and they are very interrested to continue that way.
      • 2 Years Ago
      Just one thought... In one TedTalk (i cannot remember wich one, sorry) someone made the case that the oil price is not only dependant on demand, but very much by the obligations the Saudi state has to his people. As a result, oil price cannot drop from 70-80 dollars. And Saudi Arabia, being the biggest oil producer, they can do the price!
      Giza Plateau
      • 2 Years Ago
      Crude is trading at 92$ and Brent at 115$. In 2003 both were at 25$.
      Rick
      • 1 Month Ago
      Lets hope the China, India and wish we all don't become Californian oil guzzling oilaholics because the worlds oil supplies wont last long.
      Zapbrannigan
      • 2 Years Ago
      We'll see the price of gas tank when EVs start making serious inroads into the Oil's monopoly. They will retaliate by slashing prices (and profits) to try to keep their industry alive and preventing a total switch from gas to electric. Next 10 years will be very funny...
        paulwesterberg
        • 1 Month Ago
        @Zapbrannigan
        Switching the entire vehicle fleet will take a lot longer than that, since less than 1% of current vehicles are electric now - probably closer to 20 years before 90% of passenger cars on the road are electric. Fossil fuels have lots of uses beyond vehicle fuel, plastics, fertilizer, carbon fiber etc. Ships & airplanes will be even slower to switch fuels but could use biofuel, natural gas, nuclear or coal/coalgas. The amount of oil produced may decline, but I bet that Exxon's profits will remain healthy.
          paulwesterberg
          • 1 Month Ago
          @paulwesterberg
          Just for the record - I hate oil companies.
          EZEE
          • 1 Month Ago
          @paulwesterberg
          Lessons is Liberal Logic, Episode #331 Preach against hate, then rattle off things they hate. This has been another episode of Lessons in Liberal Logic
          marcopolo
          • 1 Month Ago
          @paulwesterberg
          @ paulwesterberg " I hate oil companies." Of course you do ! It's very popular to make the oil companies the bad guys ! But, you use the products they produce, and enjoy the benefits of a society completely created and dependent on oil. I don't say that makes you a hypocrite exactly, but it's not helpful when you are making predictions. To have 90% of the vehicles on the road as electric, even within 50 years would require the production of no less than 50 million EV's per year, starting now ! That's simply logistically impossible ! The Oil industry is hoping for a figure of 28% ( alternate fuel vehicles) within 40 years to ease the pressure on supply of fuel oil. Even that figure is challenged buy some analysts ! ( the Auto-industry is far more pessimistic). The growth of popularity for various varieties of hybrids is the best indication that the oil industries analysis may be correct . But the biggest single polluter, is never mentioned. In environmental terms, a single container ship can be as pollutant a 50 million vehicles ! Yet curiously, removing this number one polluter, is never mentioned by the more extreme EV advocates !
      Rick
      • 2 Years Ago
      Who are guzzling up all the worlds oil supplies? Looks like the USA uses more oil than the next 6 countrys combined. #1 United States: 20,730,000 bbl/day #2 China: 6,534,000 bbl/day #3 Japan: 5,578,000 bbl/day #4 Germany: 2,650,000 bbl/day #5 Russia: 2,500,000 bbl/day #6 India: 2,450,000 bbl/day #7 Canada: 2,294,000 bbl/day #8 Korea, South: 2,149,000 bbl/day #9 Brazil: 2,100,000 bbl/day #10 France: 1,970,000 bbl/day #11 Mexico: 1,970,000 bbl/day #12 Italy: 1,881,000 bbl/day #13 Saudi Arabia: 1,845,000 bbl/day #14 United Kingdom: 1,827,000 bbl/day #15 Spain: 1,573,000 bbl/day #16 Iran: 1,510,000 bbl/day #17 Indonesia: 1,168,000 bbl/day #18 Taiwan: 965,000 bbl/day #19 Netherlands: 946,700 bbl/day #20 Thailand: 900,000 bbl/day #21 Australia: 877,300 bbl/day #22 Singapore: 800,000 bbl/day #23 Turkey: 715,100 bbl/day #24 Belgium: 641,000 bbl/day #25 Egypt: 590,000 bbl/day #26 Venezuela: 560,000 bbl/day #27 Malaysia: 515,000 bbl/day #28 South Africa: 502,000 bbl/day #29 Argentina: 470,000 bbl/day #30 Poland: 445,700 bbl/day #31 Greece: 435,700 bbl/day #32 United Arab Emirates: 400,000 bbl/day #33 Iraq: 377,000 bbl/day #34 Sweden: 362,400 bbl/day #35 Philippines: 342,000 bbl/day #36 Kuwait: 335,000 bbl/day #37 Portugal: 332,000 bbl/day #38 Pakistan: 324,000 bbl/day #39 Nigeria: 290,000 bbl/day #40 Hong Kong: 285,000 bbl/day #41 Ukraine: 284,600 bbl/day #42 Austria: 282,000 bbl/day #43 Colombia: 269,000 bbl/day #44 Switzerland: 268,100 bbl/day #45 Israel: 249,500 bbl/day #46 Norway: 244,300 bbl/day #47 Chile: 238,000 bbl/day #48 Libya: 237,000 bbl/day #49 Puerto Rico: 234,000 bbl/day #50 Algeria: 233,000 bbl/day #51 Syria: 230,000 bbl/day #52 Vietnam: 230,000 bbl/day #53 Kazakhstan: 222,000 bbl/day #54 Finland: 220,400 bbl/day #55 Romania: 212,000 bbl/day #56 Cuba: 204,000 bbl/day #57 Czech Republic: 203,100 bbl/day #58 Ireland: 182,400 bbl/day #59 Denmark: 171,000 bbl/day #60 Morocco: 170,000 bbl/day #61 Belarus: 165,000 bbl/day #62 Peru: 156,000 bbl/day #63 New Zealand: 150,600 bbl/day #64 Uzbekistan: 148,000 bbl/day #65 Ecuador: 148,000 bbl/day #66 Hungary: 132,000 bbl/day #67 Bulgaria: 131,400 bbl/day #68 Dominican Republic: 127,000 bbl/day #69 Azerbaijan: 120,000 bbl/day #70 Virgin Islands: 115,000 bbl/day #71 Jordan: 107,000 bbl/day #72 Lebanon: 107,000 bbl/day #73 Turkmenistan: 95,000 bbl/day #74 Croatia: 93,000 bbl/day #75 Tunisia: 89,000 bbl/day #76 Serbia and Montenegro: 85,000 bbl/day #77 Bangladesh: 85,000 bbl/day #78 Yemen: 85,000 bbl/day #79 Sri Lanka: 82,000 bbl/day #80 Qatar: 80,000 bbl/day #81 Panama: 79,000 bbl/day #82 Slovakia: 74,000 bbl/day #83 Guatemala: 73,510 bbl/day #84 Jamaica: 72,080 bbl/day #85 Netherlands Antilles: 70,000 bbl/day #86 Sudan: 66,000 bbl/day #87 Luxembourg: 62,420 bbl/day #88 Estonia: 60,000 bbl/day #89 Oman: 60,000 bbl/day Must be all those environmently unfriendly Californians that guzzle more oil than China
        Dave R
        • 1 Month Ago
        @Rick
        "Must be all those environmently unfriendly Californians that guzzle more oil than China" Looks like California is around 1,800,000 bbl/day or 9.3% of the USA total consumption. Considering that CA has over 12% the population of the USA, I'll suggest that California is doing OK in comparison to the rest of the country (not that it couldn't be better!) http://www.eia.gov/beta/state/data.cfm?sid=CA#Consumption
        brotherkenny4
        • 1 Month Ago
        @Rick
        It's one of the weird things about California. They are concerned about the environment because their environment is so bad. They are not crazy, they just live in one of the most polluted places. If you live in Nebraska you can spew forth all the pollutants you want because cumulatively it never amounts to much (just not that many people and a flat windy place). It's one of the great failures of the left and the right that they don't recognize that. Instead we get sound bite information from both sides.
        2 Wheeled Menace
        • 1 Month Ago
        @Rick
        That's astounding - can you cite your source though? Is it not amazing that China has something like 4.5 times more people than we do, and effectively their entire country uses 1/3rd of the oil we do? and they must be doing more manufacturing than us, by a long shot. They probably use a crap-ton of coal, but that is still amazing ( if your statistics are true )
        EZEE
        • 1 Month Ago
        @Rick
        And? Your point is?
      Nathan Lemmon
      • 2 Years Ago
      People need to start to think about electric cars (and the concept of electricity from non-fossil fuel sources) as something that is beneficial for the air quality in cities rather than for helping with global warming.
        Spec
        • 1 Month Ago
        @Nathan Lemmon
        Tragedy of the commons.
        paulwesterberg
        • 1 Month Ago
        @Nathan Lemmon
        People need to start to think about the longterm cost of cars, when burning fuel derived from oil your operating costs will fluctuate dramatically and their unpredictability will affect the resale value of inefficient vehicles. The cost to fuel an electric vehicle will be lower and much more predictable.
      krona2k
      • 2 Years Ago
      They never said it will be cheap, so yeah if it's expensive enough supply will be adequate with respect to demand. For about the last 6 years production has only crept up, and that increase is mostly from non conventional sources. So, no, all is not peachy with oil production which means we finally, slowly, start to transition to plug-in vehicles, and not before time!
        Rob Mahrt
        • 1 Month Ago
        @krona2k
        Right, even if supply is not as dire as expected, the cost of production on the average barrel of oil is still increasing, as more and more oil come from these unconventional sources. Oil companies will surely keep their margins high which would mean prices stay stable or increase still.
      EZEE
      • 2 Years Ago
      No! This isn't true. Gas prices are high due to high demand, due to the thunderingly strong economy! This is why gas prices are high! Obama said so.
        Ford Future
        • 1 Month Ago
        @EZEE
        Making stuff up, like Romney.
          EZEE
          • 1 Month Ago
          @Ford Future
          And when gas prices are on the rise again because as the economy strengthens, global demand for oil increases. And if we start seeing significant increases in gas prices, losing that $40 could not come at a worse time," Obama said. Uhm, yea. Ignoring their own words. Like a liberal.
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