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Price spikes feared as Asian oil production drops

Region faces increased reliance on imports as aging fields decline

Oil pumps stand idle at a field in Daqing, China.

SINGAPORE -- A global focus on rising oil output in the U.S. has overshadowed an important trend elsewhere in the market. Falling oil production in Asia is forecast to accelerate as major fields dry up, which will stiffen demand for foreign barrels and help absorb the global glut. But Asia will be increasingly vulnerable to sudden price spikes as its reliance on imports climbs.

U.K.-based energy research firm Wood Mackenzie says Asia will play an important role in balancing global oil markets because no other region faces such a severe slump in production up to 2020. Its annual decline rate on existing fields is around 7% -- significantly higher than the global norm. At the same time, the region will see stronger growth in oil demand from transportation than the rest of the world as its economies continue to expand and car ownership soars.

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