by Daniel J. Graeber, Oil Price:
U.S. oil production is putting a crimp on demand from OPEC suppliers, the cartel said in its monthly report for March. Saudi Arabia alone cut its output by around 700,000 barrels per day during the last two months in 2012. Some reports said that if U.S. oil production expands as it has, it may overtake Saudi Arabia by the end of the decade. That did little to discourage Saudi Oil Minister Ali al-Naimi, who said Asian demand may keep oil markets bustling. OPEC, in its last report, said it left its predictions for 2013 unchanged from last year. Though Asian demand may indeed keep the cartel relevant, internal developments in member states may crimp its mid-term potential.
The U.S. Energy Department said it expects domestic oil production to reach 7.9 million barrels per day by next year. The average for November and December was 7 million bpd, the highest volume recorded in twenty years. Demand for crude oil from members of the Organization of Petroleum Exporting Countries, meanwhile, declined 100,000 bpd compared to 2011 and should drop another 400,000 bpd in 2013, the cartel predicted. Saudi Oil Minister Ali al-Naimi said this week that the United States will “undoubtedly” play a greater role in the future oil market. For OPEC, however, the minister said there was an emerging pivot to Asia.
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