Role of oil in US energy mix still expanding

Crude oil will make up 39.7 % of the mix of energy products for the US in the year 2020, up slightly from the 39.4 % share it held in 1999, according to a government forecast. The Department of Energy's Energy Information Administration said the economic slowdown and terrorist attacks that has marred short-term oil demand should be muted by moderate oil prices that will facilitate oil demand growth in the US.
The world's oil supply by 2020 will be 41 mm bpd larger than 2000 levels, with two-thirds of that increase coming from members of OPEC. Consequently, the EIA predicts that OPEC will regain some of the market share it has lost since 1973.
"While the long-term outlook for non-OPEC supply remains optimistic, the low oil price environment of 1998 and early 1999 had a definite impact on exploration and development activity," the agency said in its International Energy Outlook 2002 report.

OPEC members, on the other hand, have large reserves and low expansion costs, and could increase their production capacity by 3.3 % a year through 2020, the EIA said. The group is predicted to use 95 % of its capacity from 2015 through 2020, the end of the agency's projection period.
By 2020, the EIA said, OPEC will control 48 % of the world's oil production, compared with current levels of 39 %. The group held 52 % of the world's production in 1973. The EIA backed off of dire prediction of US production growth issued in the same report last year, saying that higher oil price paths and technological advances will keep US production from eroding too badly.

The report pegs oil prices of $ 23.15 a barrel in 2005, on the higher end of the range generated by price forecasts from an array of sources. By 2015, the EIA said, oil should carry a price of $ 24.45 a barrel. Price forecast are contingent, though, on OPEC production levels and the timing of a recovery in eastern Europe and the former soviet union, the agency warned.