OPEC feels pressure from North America

Feb. 14, 2013 at 7:58 AM
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NEW YORK, Feb. 14 (UPI) -- The 12-member OPEC oil cartel might not be able to hold up against a North American oil production surge, a report from Citigroup stated.

The U.S. Energy Department's Energy Information Administration says U.S. crude oil production will increase more than 20 percent from 2012 levels to 7.8 million barrels per day within two years.

For Canadian oil supply, the Organization of Petroleum Exporting Countries said it expects an average of 3.9 million barrels per day, an increase of 180,000 bpd from the previous year.

A commodities research report from Citigroup Inc. said North American oil might be an influencing factor on OPEC's survival as a cartel.

"OPEC should find it challenging to survive another 60 years, let alone another decade," the report was quoted by Bloomberg News as stating.

A September report from Citigroup predicted that OPEC-leader Saudi Arabia may need to start importing oil by 2030 to meet domestic energy demand. Saudi crude oil production is in decline, OPEC's report for February stated.

OPEC said global markets may need 29.8 million bpd of its oil this year, a 300,000 bpd decline from its previous January estimate.

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