API: falling oil price may not affect U.S. oil industry in long run

The impact of the current oil price plummet toward the U.S. oil industry will be short not long, due to future growing world demand and technology improvement, said the American Petroleum Institute (API) on Tuesday.

The current falling oil price will affect the U.S. oil industry in a short run by cutting companies' investments and spending, said API President and CEO Jack Gerard when the association released its annual energy report "State of American Energy report in 2015".

"However in a longer term there will continue to be considerable investment in finding and developing new forms of energy," said Gerard.

According to the prediction of the U.S. Energy Information Administration, global demand for liquid fuels will increase by 25 percent in the next 25 years, driven by the development of emerging markets and nations.

API's senior economic advisor Rayola Dougher told Xinhua that low oil price will force the U.S. oil companies to invest more on technical innovations to improve production efficiency as those with high cost will be phased out from the business, which is better for the industry's future development.

She also think it's still too early to predict the impact of the current price falling on the U.S. oil industry as the cost of producing shale oil is quite different in the United States and the trend of oil price is quite hard to predict.

"In North Dakota for example, they are producing crude oil there from 25 dollars a barrel to 80," said Dougher.

"The last time we saw downturn in 2008. It went down in June from over 140 U.S. dollars a barrel to 35 by December and by the next summer it back up again to near a hundred. So we don't know where it is going to settle out," she said.

If the oil price recovers this summer, the impact toward the U.S. oil industry will be very small, Dougher added

Dougher also said the falling oil price will benefit world economic growth, which will also stimulate world oil demand and help to rebalance the oil price.

Oil price has fallen from over 100 dollars a barrel in June 2014 to around 50 dollars this week, the lowest level since the spring of 2009 as the sluggish recovery of world economy reduced oil demand, while the supply kept moving upward pushed by U.S. shale oil boom and OPEC's decision to maintain the oil output. Endi