I.E.A. Report: Americas are the Future of Oil Production

A report released by the International Energy Agency (IEA) this morning concludes that oil (NYSE:USO) production on the North and South American continents will lead the world in growth through 2016. The report expects global oil supplies to increase by a rate of 1.1 million barrels per year over the next half decade, a downward revision from previous estimates of 1.2 million barrel annual increases.Where will the increased capacity come from?

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Canada was singled out by the Paris-based organization as a future leader in production, having yet to reach potentially high yielding supply increases from its “oil sands” in the Alberta region. A little known, or acknowledged tidbit, is that our neighbors to the north are already the leading oil importer to the United States. Brazil too is thought to be a source of vast, untapped reserves, mostly in costly and difficult to access deep-water deposits off its eastern coastline. The U.S. will join the group of expected production boosters, with oil fields in Texas and North Dakota expected to contribute an estimated 500,000 barrels daily to the global supply.

Political turmoil in the Middle-East over the past six months caused global oil prices to spike, yet spot crude prices have been falling at a swift clip for the past few weeks due to increasing fears that the U.S. recovery is entering a slowdown and that China will have difficulty sustaining current growth rates.

BP (NYSE:BP) released its own report last week confirming the IEA’s speculation that oil production is blossoming in non-OPEC nations as well. The oil-company said that about half of the 1.8 million barrel/day increase in production last year was attributable to non-Opec countries.

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