Oil production growth in the U.S., Brazil, Canada and Norway is sufficient to keep the world well supplied in meeting global oil demand growth through 2020, International Energy Agency's latest annual report on oil markets.
"More investment will be needed to boost output after that," according to Oil 2018, the IEA's five-year market analysis and forecast.
According to the report, over the next three years, gains from the U.S. alone will cover 80 percent of the world's demand growth, with Canada, Brazil and Norway - all IEA family members - able to cover the rest.
The report finds that despite falling costs, additional investment will be needed to spur supply growth after 2020.
"The oil industry has yet to recover from an unprecedented two-year drop in investment in 2015-2016, and the IEA sees little-to-no increase in upstream spending outside of the United States in 2017 and 2018," the IEA stated.
Boosted by economic growth in Asia and a resurgent petrochemicals industry in the U.S., global oil demand will increase by 6.9 million barrels per day (mb/d) by 2023 to 104.7 mb/d, according to the IEA.
In addition, global oil production capacity is forecast to grow by 6.4 mb/d to reach 107 mb/d by 2023.
"Thanks to the shale revolution, the U.S. leads the picture, with total liquids production reaching nearly 17 mb/d in 2023, up from 13.2 mb/d in 2017. Growth is led by the Permian Basin, where output is expected to double by 2023," the IEA said.
- OPEC output
The report says that virtually all of the OPEC output growth comes from the Middle East.
"In Venezuela, oil production has fallen by more than half in the past 20 years, and declines are set to accelerate," the report said, and added that sharply falling production in Venezuela will offset gains in Iraq, resulting in OPEC crude oil capacity growth of just 750,000 barrels a day by 2023.
"Unless there is a change to the fundamentals, the effective global spare capacity cushion will fall to only 2.2 percent of demand by 2023, the lowest number since 2007," the agency predicts.
By Gulsen Cagatay