Oil Prices

Oil prices rose for a third day to the $53 US a barrel range, but Citibank is predicting the price will eventually drop to $20 a barrel. (Hasan Jamali/Associated Press)

The Organization of Oil Exporting Countries says Canada's oil output will grow more slowly than expected because of lower oil prices, but will continue to expand until 2030.

The latest World Oil Outlook from the cartel said the liquid supply from non-OPEC sources will continue growing over the next few years, from 56.2 million barrels a day in 2014 to e 57.5 million barrels in the first quarter of 2015.

That's despite a glut of oil that has seen prices fall by 50 per cent in the past eight months. Oil production won't peak in North America until 2030, OPEC said.

The report comes as Citibank predicts oil storage in North America will be close to capacity by the second quarter of 2015.

Citibank is now predicting oil prices as low as $20 US a barrel later this year as the glut of oil grows. That's an additional 55 per cent drop in the price of crude.

Signs of a slowdown in U.S. drilling, seen last week in a report of fewer active drilling rigs, doesn't mean the crude glut will be eliminated, said Edward Morse, Citigroup's global head of commodity research.

Oil now at $52 US

Oil contracts had risen for a third day in a row on Monday, after weeks of declines. The West Texas Intermediate, the contract traded in New York, was up $1.05 at $52.74 a barrel.

Brent crude, the contract traded in London, rose 32 cents to $58.12 and Western Canada Select, a contract used by many Canadian producers, rose $1.32 to $39.56.

The Canadian dollar strengthened on the rising price of oil, lifting 0.35 of a cent to 80.23 US cents.

In its outlook, OPEC pointed to the role of U.S. shale oil and Canadian oilsands crude in boosting oil output worldwide.

"On the supply side, the primary driver of recent non-OPEC output growth has been the U.S. and Canada. Most of the recent increases have been due to oil from tight crude and unconventional natural gas liquids, as well as oilsands development," OPEC said.

In Canada, oil output is expected to average 4.35 million barrels a day in 2015, which is 20,000 barrels lower than OPEC's earlier prediction as low oil prices cause oil companies to cut spending and slow output.

OPEC points to the sensitivity of Canadian oil production to lower oil prices.

"Canada’s oil production outlook for 2015 remains steady on expected conventional oil, but output from unconventional sources will gradually be affected by sustained low oil prices," the report said. 

But on the positive side, it forecast global demand for oil would rise in the coming year.