IEA: Huge Oil Price Spike Inevitable

8 Mar 2017   IEA, Oil Supply, Prices

Three years of drastic cuts to upstream spending because of the meltdown in oil prices could result in a shortage of oil supply in a few years, according to a new report from the International Energy Agency. When oil prices collapsed in 2014, oil producers quickly took an ax to their spending. Global oil and gas investment dropped by a quarter in 2015 and by an additional 26 percent last year, the IEA estimates. A long list of projects, particularly very large ones, were put on ice. Because many of these projects take years to develop, the sharp slowdown between 2014 and 2016 could result in very few sources of new supply hitting the market towards the end of the decade. To be sure, supply is already coming back. The U.S. has added more than 500,000 bpd since last summer, and shale drillers are ramping up activity. The IEA […]

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