The shale oil boom has transformed the U.S. and global energy sector to such an extent that it has upended traditional supply dynamics and made forecasts far more polarised.
Investment banks, many of which finance new projects, along with oil majors such as Total and Eni, have warned that huge spending cuts caused by a plunge in oil prices since 2014 would lead to a supply crunch in the next two years.
Yet Goldman Sachs, the only bank to make more than $1 billion a year from commodities trading, believes a looming recovery in U.S. output on the back of higher oil prices combined with an avalanche of new conventional projects will create a substantial surplus by 2019.
Prior to the shale revolution, conventional oil was the only game in town. Estimating future supply essentially involved calculating the project pipeline and factoring in the "unknown knowns" such as political risk in oil-producing nations.
The ability of the shale sector to adapt quickly and nimbly to a lower-price environment means production cycles have shortened as fields can be switched on and off in a matter of weeks.
Most forecasters including OPEC and the International Energy Agency underestimated shale's decline during the oil price collapse and its production increases as prices recovered.
Goldman predicts the coming two years will see a huge burst of development, complicating OPEC's efforts to rebalance the market and ease a global glut with the help of output cuts.
"This long lead-time wave of projects and a short-cycle revival, led by U.S. shales, could create a material oversupply in 2018-19," Goldman's equity research team said last month.
"As OPEC prepares for its May 25 meeting, it is likely to weigh the relative benefit of stability (extend cut) versus the risk of long-term share loss."
Goldman estimates that new projects and rising shale output could add 1 million barrels per day (bpd) to global supply by 2018-2019.
The forecast contrasts with those of consultancy Wood Mackenzie, which foresees a supply gap of 20 million bpd by 2025, and Goldman's rival Morgan Stanley, which believes a surge in U.S. production this year will not derail the rebalancing.
"OPEC has successfully constrained output, and although drilling activity in U.S. shale is picking up rapidly, this will probably not come quick enough to prevent a period of sizeable inventory draws late this year," Morgan Stanley said.
"By 2020, we estimate that (around) 1.5 million bpd of demand will need to come from projects that have not been sanctioned yet, but that have break-even oil prices of $70-75 a barrel," the bank said.