Experts forecast severe oil crunch

(Bloomberg): Falling crude-oil supplies and surging demand are likely to lead to “a severe oil crunch” within five years, according to Mamdouh G. Salameh, an independent oil economist. The CHART OF THE DAY displays Salameh’s projections for annual production and demand, along with supply shortfalls, at five-year intervals through 2030. The data comes from a paper published by the U.S. Association for Energy Economics and its international counterpart and posted on the Social Science Research Network, an online library. This year’s projected shortfall of 4.87 million barrels a day is likely to widen to 9.2 million barrels in 2015, according to Salameh, director of the Oil Market Consultancy Service.

Assuming that occurs, crude oil will match or exceed its record of $147 a barrel, set in July 2008 in New York trading, he wrote. “High oil prices might be an early indication of a supply- demand imbalance that can’t be reconciled by still higher prices, Salameh said. “In that case, a more comprehensive oil shock surely awaits.”

Go to article