The U.S. Department of Energy predicted that OPEC will remain in relatively the same position in terms of market share at least through 2035. In terms of the pricing, the DOE’s Energy Information Administration said a variety of factors that contribute to a relatively consistent OPEC mean crude oil prices should increase roughly 5 percent per year for the rest of the decade.
Meanwhile, the share of renewables increases with U.S. oil production, suggesting a leading economy could retreat from the international market. The recent drastic decline in crude oil prices has sparked a renewed interest in conversations of peak oil. As the 21st century international economy realigns, however, it’s not so much a discussion of how much oil is left in the world but where it comes from.
The EIA, in its latest report, states that higher costs for non-OPEC supplies, coupled with a constant market share for OPEC, means oil prices should move along at 5 percent per year for the rest of the decade. But that pace slows down after 2020, when oil prices increase at a rate of 1 percent per year through 2035. Using 2010 dollars, oil prices by 2035 should settle at around $145 per barrel.
In terms of U.S. crude, the EIA said that, despite all the political clamouring, production has reversed the decline that began during the Reagan administration and reached 5.5 million bpd by 2010, up 500,000 compared with 2008. While critics of President Obama’s domestic energy policy like to point out that much of that increase is because of Bush-era policies, the EIA states that U.S. crude oil production should continue to move higher in part because of offshore resources in the Gulf of Mexico. Last week, close to 600 bids were submitted for a lease sale in the gulf. Washington said more than $2.6 billion were submitted in total bids.