* 2020 Brent median of $95, $80 in real terms
* Bears: shale means increasing spare global capacity
* Bulls: shale not enough to meet demand growth
* Lowest 2020 poll forecast $70, highest $160
By Claire Milhench and Alexander Winning
LONDON, Oct 30 Global oil consumers are likely
to feel the benefit of much cheaper fuel by 2020 thanks to the
U.S.-led shale boom, a Reuters survey found.
According to the median estimate of the poll, Brent crude
will average $95 a barrel over the course of 2020, a drop of $20
from the estimate in a similar survey a year ago, even though
spot oil prices have changed little since then.
Assuming an inflation rate of 2.5 percent per annum, that
would mean Brent would cost only $80 in 2020 in real terms, or
in today's money, down from $109 a barrel now.
Oil-importing nations have become accustomed to crude prices
over $100 a barrel, with 2013 set to record a third year in
succession of average prices near $110 a barrel for the Brent
More than half of those polled in the Reuters survey of 20
consultants, banks and energy analysts said they expected rising
supplies and fuel efficiency gains by consumers to push oil
below $100 a barrel.
"Essentially you have a glut of supply against a backdrop of
disappointing demand," said Julian Jessop at Capital Economics.
"We see the shale gas revolution spreading, driving down prices
and leading to a large pick-up in LNG (liquefied natural gas)
Many in the industry have been caught off guard by the scale
of the shale revolution.
Soozhana Choi, head of energy research at Deutsche Bank,
pointed out that in July 2011 the U.S. Department of Energy
forecast 2012 U.S. oil production growth of 30,000 barrels per
day (bpd), whilst the International Energy Agency predicted U.S.
supply growth of 50,000 bpd.
Growth came in at 1 million bpd.
Choi said that, "2012 laid the groundwork for the uptick in
tight oil production; 2013 was the year when the logistics
caught up with output".
ESTIMATES IN WIDE RANGE
Jessop was the biggest bear in the group, sticking with his
2012 forecast of $70 a barrel for 2020. The other bears fell
into the $85-$95 range.
Rahul Prithiani of CRISIL Research calculated global spare
supply capacity at 10 million barrels per day (bpd) by 2020, up
from around 4 million bpd in 2012.
He expected demand growth to remain subdued at a compound
annual growth rate (CAGR) of around 0.8 percent through to 2020,
whilst supply was expected to increase significantly at a CAGR
of 1.5 percent.
But several respected analysts said fresh supplies from
shale would not be enough to meet the growth in demand, meaning
prices would need to rise.
Bernstein Research was the most bullish, forecasting $160 a
barrel for 2020. Like the other bulls, Bernstein was sceptical
about how much global impact the shale revolution will have.
"There appear to be no major candidates for shale expansion
outside the U.S.," Kiran Ahmed of Oxford Economics said. "The
U.S. is advantaged by its infrastructure, land ownership rights
and relatively low population density compared to, say,
The huge price range in the poll - $90 between the lowest
and highest forecasts - reflected the uncertainty facing the
global oil industry.
"Tight oil is such a new phenomenon that the market hasn't
really reached a consensus on what the long-term picture will
be," Deutsche Bank's Choi said.
"We assume that in the next five years, shale oil is a
purely North American phenomenon," said Mike Wittner, head of
commodities research for the Americas at Societe Generale. "With
that being the case, on the supply side we'll continue to get a
(Reporting by Claire Milhench and Alexander Winning, editing
Richard Mably and Jane Baird)