OPEC Market Share To Hold Steady: Forecast
The U.S. Department of Energy is predicting that OPEC's market share will remain relatively the same at least through 2035.
While the development may decrease U.S. vulnerability to foreign shocks, the nation will remain exposed.
The DOE's Energy Information Administration latest report showed US crude oil production for the last week of June stood at around 6.3 million barrels per day, compared with roughly 5.6 million a day a year ago, clear confirmation that the decline that began during the Reagan administration has been reversed.
Technological advancements in the development of so-called tight oil and the return to offshore oil production in the US waters of the Gulf of Mexico could push domestic crude oil production to close to 8 million barrels per day by 2035, according to the EIA.
Meanwhile, US energy consumption isn't expected to return to the levels seen before the economic collapse of 2008 "because of moderate projected economic growth," according to the EIA.
A key component of the equation is oil prices, which the EIA expects to increase at roughly 5 percent per year for the rest of the decade; the increase will slow to 1 percent a year through 2035. Based on 2010 dollars, by that time oil should cost around $145 per barrel.
This year's volatility in crude oil prices has sparked a renewed interest in conversations of peak oil.
As the global economy realigns in the 21st century, it's not so much a matter of how much oil is left in the world but where it comes from.
Last week, close to 600 bids to the tune of $2.6 billion were submitted for a lease sale in the Gulf of Mexico. This week, US Interior Secretary Ken Salazar was in Norway announcing that more lease sales were planned for the arctic waters off the coast of Alaska.
Satisfying world demand for petroleum products means production from resources in hard-to-reach places. But if the $145 per barrel benchmark is any indication, there will be incentive enough to reach it a and remove it.
—This story originally appeared on Oilprice.com.