The US Federal Reserve has warned that the world is awash with excess oil and starting to run out of places to store the glut, with no sustained recovery in sight for the oil industry until 2017 at the earliest. Robert Kaplan, head of the Dallas Fed, poured cold water over talk of a fresh oil boom this year and said the US shale industry has taken far longer to cut output than many expected.
“As we sit here today, Dallas Fed economists estimate that global daily oil production exceeds daily consumption by more than 1m barrels per day,” he told the Official Monetary and Financial Institutions Forum in London. “Excess inventories in the OECD member countries now stand at approximately 440m barrels. This is a record level and has raised concerns about whether there is sufficient storage capacity in certain geographic areas,” he said.T
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