Global Marketplace
146
M
arch
2014
A contrarian view from the
United Arab Emirates:
the American shale oil boom
is no cause for anxiety
From Abu Dhabi,
Gulf News
staffer Sarah Diaa reported that
market analysts in the region doubt that increased production
of shale oil in the United States poses any threat to the oil
producers of the Persian Gulf.
“I think shale oil and gas production is important for the US
and for the US industry,” Simon Williams, the chief economist
for Middle East and North Africa at HSBC, told Ms Diaa
(1 January). “I don’t expect it to have a major bearing on the
global energy market.”
This was in line with an earlier assertion by Abdullah Al Badri,
the secretary general of the Organization of the Petroleum
Exporting Countries, that OPEC could accommodate the US
shale boom. That production was reported to have reached
2.7 million barrels per day (bpd) last year and is set to grow.
Even so, analysts are expecting a drop in the price of crude
oil from the 2013 average of $108 per barrel, with higher
production the chief factor. Both the US and OPEC – of which
the UAE is a member – will contribute to this year’s greater
supply.
As to how steep a price drop can be expected over the
course of 2014, a recent report by the US Energy Information
Administration predicted a gradual reduction and an average
of $104 per barrel for the year. In general, observers of the
UAE oil market did not foresee much of an effect in the
vicinity.
“It won’t have a major bearing,” said Mr Williams of HSBC.
“Whether oil is at $100 or $120 a barrel doesn’t make that
much difference. Oil revenues only seep through into the
domestic economy when spending increases. I don’t think
[changing] oil prices will have an impact on spending plans.”
OPEC itself was bullish on the oil market. In December it
declared, “Although world oil demand is forecast to increase
during 2014, this will be more than offset by the projected
increase in non-OPEC supply.”
›
Gulf News
also reported (2 January) that crude oil from
Iraqi Kurdistan (KRG) had started flowing through a new
pipeline to the Turkish Mediterranean export hub of Ceyhan,
but that it would not be shipped to world markets without a go-
ahead from Baghdad. “[The oil] is being stored,” the Turkish
energy minister, Taner Yildiz, said at a news conference. “It will
not be exported without the consent of the Iraqi government.”
Late last year Turkey signed a multi-billion-dollar energy
package with KRG which will see the rich hydrocarbon
resources of the semi-autonomous Kurdish region exported
TUBE 2014 DÜSSELDORF
: 07.04. – 11.04.2014, HALLE 6, STAND C34
