Economy and US oil supplies haunt OPEC meetings


Two European-based OPEC meetings have highlighted the issues facing the oil cartel from the global economy and US oil supplies.

In a seminar held at OPEC Headquarters in Vienna, oil majors - in particular ConocoPhillips - presented the US' predictions for shale oil and gas production over the next eight years, predicting that production of shale liquids from the US alone is likely to grow by 150%.

The increase in this form of resource could shift the balance of power from OPEC as the main production controlling cartel, to the exploration majors already looking beyond North America and into Eastern Europe and Australasia for apparently abundant sources of shale oil.

However, OPEC's position was robustly defended in the seminar, not least by Venezuela's Oil Minister, Rafael Ramirez, who claimed that environmental and technical issues surrounding shale oil extraction would never give shale oil dominance over traditional oil production methods.  He did, however, state that OPEC would welcome any nation that became energy self-sufficient - a stated aim of the Obama Administration in the US.

Meanwhile, in Brussels, shale was also on the agenda as OPEC leaders met their European Commission counterparts at the ninth Energy Dialogue.  Volatile oil prices and the global economy were also on the agenda as the EC's Commissioner for Energy praised OPEC for its response to market needs at a time of potentially high oil prices in a fragile economic climate.

In return, OPEC highlighted the need for oil price stablility and that OPEC reserves play a key role in relieving market pressure when required.  The eurozone crisis, along with excessive energy speculation in global markets, were considered the key reasons for the current volatility.  While an EU-led roadmap for 2050 showed a broadening of energy sources, OPEC stated that oil would remain the leading fuel type to support global energy demand for the forseeable future.