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A rise in output of North American tight oil will not trouble OPEC, the group's secretary general said on Tuesday, maintaining his view that the new supply source will not significantly impact the group's market share.
Abdullah al-Badri, attending the annual Oil and Money conference in London, referred to forecasts of rising production of tight oil, also known as shale, but said that would not be a problem for the 12-member OPEC.
"I do not think that with this quantity OPEC is in trouble," Badri said.
The Organization of the Petroleum Exporting Countries, sceptical of information available, has been looking more closely at shale oil this year. It decided in May to carry out its own investigation on shale's potential.
Already, the U.S. shale boom has altered the landscape of oil trade. For example, OPEC members Nigeria and Algeria have seen demand for their crude fall in the U.S., the world's top consumer, because of growing domestic supply.
But this need not alarm core OPEC members such as Saudi Arabia in the longer run, according to a senior International Energy Agency (IEA) official also at the conference.
"In the next few years we will continue to see growth in U.S. shale oil, which is very good news for the U.S. and the rest of the world," IEA Chief Economist Fatih Birol told Reuters.
"But I don't think that this has either the resource base or the economics to replace Middle East oil," he added. The IEA advises industrialised countries on energy policy.
Tight oil output would be in decline by 2018 and the cost of such developments means that a sharp drop in oil prices would restrain supplies, Badri said.
"This tight oil is hanging on the cost. If the (price) were to drop to $60 to $70, then it would be out of the market completely."
Current prices, of $108 a barrel for Brent crude, are at an acceptable level for producers and consumers, he said.
Shale is more expensive to produce than oil from the giant conventional fields of the Middle East but cheaper than deepwater megaprojects
OPEC production had not risen by more than 200,000 to 400,000 bpd above its 30 million bpd cap since 2011, an official said.
Oil slipped towards $65 a barrel on Monday as signs that U.S. shale oil production was recovering.
OPEC forecast demand for the group's oil will drop to 28.78 million barrels per day (bpd) in 2015.