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Thursday, August 10, 2006

Global Oil Output to Surge 25% by 2015

By Yaser Anwar, CSC of Equity Investment Ideas

Oil and natural gas production capacity should surge by 25% to 110 million barrels per day by the year 2015 - the result of investments in new and unconventional petroleum sources like oil-sand deposits and oil shale, according to a study conducted by Cambridge Energy Research Associates (CERA).

The research firm's forecast, if accurate, "would ease the current perception of taut supplies that have driven oil prices up 25% so far this year and 285% since the end of 2001," according to Investor's Business Daily.

While presently, there are only approximately 2 million barrels worth of spare crude capacity - considerably less than the amount available just 10 years ago - Cambridge predicts there will be some 12 million by 2010.

The group's report does acknowledge the probability of continued oil production declines in the U.S. and Europe's North Sea, but it anticipates considerable increases - especially among OPEC member nations.

Peter Jackson, CERA's director of oil industry activity, insisted that an increase in production has more than offset the aggregate disruption - thereby generating a net gain in spare production capacity.

"There is not really a supply problem in our view," said report co-author Jackson, according to the Boston Herald. "We see no reason why any reasonable demand level won't be met."

Source: CERA

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