Insight
Oil supply long-term outlook H1 2017: US tight oil vs conventional
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Report summary
Stable oil prices since the OPEC agreement to cut production in late 2016 have led to a return in near-term growth, driven primarily by onshore US supply. The pace of growth onshore US and from other non-OPEC sources including Brazil, Russia and Canada, poses a major challenge for OPEC in the short-term. We have made strong upward revisions to our supply outlook since H2 2016, weighted towards non-OPEC producers. OPEC crude oil capacity in the longer term has been revised down, mainly due to a downgrade in Venezuela, where the pace and potential supply of heavy oil has been lowered. This is offset by growth in Iran and Iraq and recovery in Libya in the near-term.
Table of contents
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Executive summary
- Non-OPEC: US tight oil's second growth phase will dominate supply growth to 2025
- OPEC: near to medium term strategy and political risk
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Three themes that will shape global supply
- US tight oil – how big and at what cost?
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Tight oil vs deepwater: costs for conventional projects have further to fall
- Why are deepwater costs taking so long to reset?
- Breakevens for deepwater projects: lower, but a shrunken pool
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OPEC production cuts, strategy and political risk
- OPEC's commitment to production restraint
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Appendix
- Political Assumptions for the Supply Forecast
- OPEC
- Non-OPEC
Tables and charts
This report includes 4 images and tables including:
- US tight oil production growth
- Pre-FID liquids cost curve
- Associated split of production
- Global supply outages: base case assumes relatively benign view
What's included
This report contains:
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