Judging by all, OPEC will keep unchanged a minimum level of oil production after the meeting between the Oil Ministers. But the main issue for the world market is Saudi Arabia’s reaction to a shortage of deliveries by supplying the market with a record volume.
The era that has just started could end quickly. The US will not be able to increase production for a long time. The experts believe that after 2-3 years the oil production in the US will start declining.
Six months ago the analysts forecasted increase in oil production in the OPEC member-states, which would demanded reduction from Saudi Arabia.
When it was clear that oil production in Libya, Iran and Iraq did not go up and resources in the industrial developed countries dropped to the lowest level of 2008, the OPEC analysts have revised their decision. Experts of Energy Aspects Ltd company believe that Saudi Arabia will have to increase production up to a record 11 million barrels a day by December to cover shortage of production in other OPEC member-states.
“The question is not if Saudi Arabia is going to place additional volume of oil at the market, but if it is going to maintain the current production volume. OPEC could face another problem – it will get harder to maintain the current volume of oil deliveries,” said IHS Inc analyst Jamey Webster.
The shale revolution in North America had contributed to increase in production, but volume of supply in other region is declining. The struggle for political control in Libya, attacks at the oil pipelines in Iraq and maintaining sanctions against Iran do not allow the countries increasing oil production.
Saudi Arabian Oil Minister Ali al-Naimi told journalists in Seoul on May 12, 2014 that any excess supply at the oil market will be covered. He added that Saudi Arabia is able to increase oil production up to 12.5 million barrels a day.
On June 5, 2014 the OPEC Economic Commission of the Managing Council, which evaluates the balance of demand and supply at the global oil market, released the report, according to which the current oil production is adequate.
