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German BND spy agency sees shale depressing oil prices for decades

Andreas Rinke
Thursday, 31 Oct 2013 | 12:32 PM ET

BERLIN, Oct 31 (Reuters) - The U-S.-led shale boom will have a lasting impact on global energy prices and push crude oil prices down to $80 a barrel, according to an analysis by Germany's BND intelligence agency obtained by Reuters on Thursday.

The BND said the U.S. shale boom would have a greater impact on global markets than it predicted in a previous analysis earlier this year.

"The effects from the unconventional production of oil and natural gas in the United States will be pronounced over the next 10 to 20 years," the report said.

It added that it now expects global oil prices to sink substantially, which will cause considerable problems for gas and oil producers such as Russia and Libya and trigger changes in the Middle East.

The report said such changes would cause the biggest risks for Iran, Libya, Venezuela and Yemen, because the governments in these producer countries were banking on high prices.

It said it is possible crude oil prices will fall lastingly to about $80 per barrel.

A Reuters survey published on Wednesday found Brent crude will average $95 a barrel over the course of 2020, a drop of $20 from the estimate in a similar poll a year ago even though spot oil prices have changed little since then.

Assuming an inflation rate of 2.5 percent per annum, that would mean Brent would cost only $80 in 2020 in real terms, or in today's money, down from $109 a barrel now.

Oil-importing nations have become accustomed to crude prices over $100 a barrel, with 2013 set to record a third year in succession of average prices near $110 a barrel for the Brent benchmark.

More than half of those polled in the Reuters survey of 20 consultants, banks and energy analysts said they expected rising supplies and fuel efficiency gains by consumers to push oil below $100 a barrel.