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Peak demand for oil in 2022: Prices to stay low but temporary shortages cannot be ruled out
Oct 03: The model makes no projections on oil prices but given the demand-supply projections, prices are expected to stay low in the face of declining demand.
8When OPEC cuts production, unconventional producers who are efficient enough to be profitable at an oil price of USD50-55 per barrel, and probably even lower in the future, can respond rapidly at that trigger point with production increases that defeat OPEC efforts to raise prices.
8Because they are not bound by OPEC agreements, unconventional producers can do this every time, creating a situation where large conventional field operators will always be beaten to the rewards of dearer oil before prices are forced down again by rising supply.
8This is set to create a medium-term supply challenge because operators are reluctant to invest in large conventional field developments while oil prices are low.
8While this model does not build to forecast short- and medium-term trends, oil production shortages seem likely if production from conventional fields declines faster than the output from unconventionals grows but all of this does not take away from the basic projection that consumption of oil will decline from 2022 onwards.
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