BP Says Oil Price at its Most Stable Since Early 1970s
FT.com – Despite jitters over Iraq, the price of oil is at its most stable since the early 1970s, as a huge increase in US oil production offsets massive disruptions to supply from places such as Libya, according to BP.
Christof Rühl, group chief economist, said the world had seen a cumulative 3m barrels a day of supply disruption since the start of the 2011 Arab uprising but that had been “cancelled out” by a similar extra amount of US production.
“There has been an almost perfect match between outages in north Africa and elsewhere and US production growth,” he said. The equilibrium had created an “eerie quiet” in global oil markets.
“It’s sheer coincidence – they have nothing to do with each other so won’t last forever,” he added.
Mr Rühl was presenting BP’s latest annual Statistical Review, an oil industry bible which contains country-by-country data on oil and gas production, consumption and reserves.
This year’s review highlights the huge impact America’s shale revolution has had on global energy markets. The widespread use of techniques such as hydraulic fracturing, or fracking, and horizontal drilling has opened up vast reserves of oil and gas that were long thought uneconomic.
The shale boom has transformed America’s energy outlook, ending a decades-long decline in oil production and cutting natural gas prices by two-thirds from their 2008 peak. It has also encouraged hopes of an industrial renaissance based on cheap energy.
By Mark Green
Originally Posted June 16, 2014
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