America's oil and gas output could soar 25% by 2025

US oil and gasoline inventories unexpectedly rise

Global oil demand is expected to keep rising over the next two decades, albeit at a steadily decreasing pace, according to a new report released Tuesday by the International Energy Agency.

According to the IEA, China overtakes the U.S. as the largest oil consumer around 2030, and its net imports reach 13 million barrels per day in 2040.

By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook.

"The US will become the undisputed leader in oil and gas production for decades, which represents a major upheaval for global market dynamics", Birol adds. But analysts expect the price to not rise much further in coming months as the USA ramps up production.

"This is the equivalent of adding another China and India to today's global demand", the IEA said in its report. Indeed, the IEA also suggests that demand for oil will remain supported by lower prices, going forward.

"Over the same period, United States gas companies ramped up their exports to Canada and Mexico, pushing net USA imports of pipeline gas down to around 25 bcm in 2016, compared with 80 bcm some ten years earlier", IEA economists said.

Climate activists said the IEA report is too negative, but added that it highlights the need for more action to combat climate change.

Moreover, the IEA called into questions remarks by some crude oil players - including the 14-country producing cartel OPEC - that the market is actually rebalancing, which in their view would be the main reason for rising prices.

"Solar is forging ahead in global power markets as it becomes the cheapest source of electricity generation in many places", said Fatih Birol, executive director of the IEA.

Echoing the forecast by IEA, the Organisation of the Petroleum Exporting Countries said after long years of punishingly low oil prices, there is "increasing evidence" that the oil market is moving closer to reaching a healthy balance between supply and demand.

After hitting a 10-year low of less than $30 in January, down from a peak of more than $100 in mid-2014, oil prices have recently been hovering around the $55 mark.

Total energy demand is expected to have grown by 30 percent by 2040 — and would be growing twice that without efforts to improve energy efficiencies. "Iraq and Egypt, and modest changes elsewhere", said IEA. Oil demand, it says, is slowing down, but it will not be reversed before 2040, even as electric-car sales rise steeply.

Oil prices have risen in recent months, after both Opec and non-Opec countries struck a landmark deal at the end of past year to cut back production to combat a global oil glut.

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