The United States' (US) shale oil boom will not become spoiler for oil markets, as fast rising global demand is likely to absorb new output, Reuters reported on Wednesday, citing US Energy Secretary, Rick Perry.
"There is a lot of reforms going on around the world - in the kingdom (of Saudi Arabia), in Mexico, in India - those reforms have the potential to really drive the consumption," he said, speaking at a rare joint panel with Russian and Saudi energy ministers, Alexander Novak and Khalid Al-Falih, in Davos.
The Organization of the Petroleum Exporting Countries (OPEC), led by Saudi Arabia, and non-OPEC Russia agreed to cut production during 2017-2018 to support crude prices.
The US has not been a party to the pact, as its industry is led by private producers that can be sued for collusion if they join the deal.
The markets were too much focused on the swings in American shale production, which still represented a fairly modest portion of the global output, Novak and Al-Falih said.
Mexico and Venezuela's output were declining, Al-Falih said, expecting a surge in global demand for oil over the next 25 years to 120 million barrels per day (mbd) from the current levels below 100 (mbd).
The American shale output is expected to rise by 1 mbd this year, bringing the country's total production to above 10 mbd.
Novak also said that growth in the US output was unlikely to tip oil markets back into a surplus, as demand was rising fast and old oilfields were depleting around the world.
Oil producers would ultimately return to direct competition when the OPEC/non-OPEC deal expires, Novak added, but did not say when it could happen.
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