Oil production capacity is surging in the United States and several other countries at such a fast pace that global oil output capacity is likely to grow by nearly 20 percent by 2020, which could prompt a plunge or even a collapse in oil prices, according to a new study described on Phys.org.
Leonardo Maugeri, a former oil industry executive who is now a fellow at Harvard University's Kennedy School of Government, based his findings on an original field-by-field analysis of the world's major oil formations and exploration projects.
Contrary to some predictions that world oil production has peaked or will soon do so, Maugeri projects that output should grow from the current 93 million barrels per day to 110 million barrels per day (bpd) by 2020, the biggest jump in any decade since the 1980s, according to the report.
What's more, this increase represents less than 40 percent of the new oil production under development globally: more than 60 percent of the new production will likely reach the market after 2020.
Maugeri's analysis finds that the gross additional production from current exploration and development projects in the world could produce an additional 49 million barrels per day by 2020 - an increase equivalent to more than half the world's current 93 million bpd.
The combination of new production in the Western Hemisphere and the still growing production in other parts of the world could lead to a sharp drop in oil prices, the article states.
Click here to read the Phys.org article.