Вторник, 24 Апреля, 2018

Crude Jumps 2% But Ample Supply Predicted through 2020

Crude Jumps 2% But Ample Supply Predicted through 2020 Crude Jumps 2% But Ample Supply Predicted through 2020
Nellie Chapman | 07 Марта, 2018, 13:00

The new wave is underpinned by higher oil prices following the pact between OPEC producers and a group of non-OPEC countries to collectively curb output through this year. The agency now expects production to average 10.7 million barrels a day this year - a slight increase from its previous forecast and a new record.

The EIA on Tuesday made its latest in a series of upward revisions for US crude oil production, which it now expects to rise by more than 120,000 barrels per day (bpd) to 11.17 million bpd by the fourth quarter of 2018.

Shale oil is expected to double its market share of global crude supply to an estimated 10% within five years, but the lack of investment offshore during the industry downturn in 2015 and 2016 could begin having an impact in that same period, the CEO of Hess Corporation said. Natural gas liquids will add another one million bpd to U.S. supply to reach 4.7 million bpd by 2023.

That would take the United States past Russian Federation to become the world's biggest oil producer.

The comments come as the USA shale boom threatens to box OPEC and its allies into prolonging their cuts to prevent another collapse in oil prices.

FBN's Jeff Flock talks to PRICE Futures Group's Phil Flynn about the prediction that the USA could soon become the largest oil producer in the world. That puts the US on track to eclipse the likes of Saudi Arabia and Russian Federation as the world's largest producer.

The surge in USA oil production could indicate less influence of the Organization of Petroleum Exporting Countries - a group of 12 of the world's largest largest oil exporters that wields considerable influence on global oil prices. Opec strugglesOutput from Opec producers will grow at a much slower pace, the IEA said, adding it expected Venezuelan production declines to accelerate, offsetting gains in Iraq.

Secretary of Interior Ryan Zinke speaks during CPAC 2018 in National Harbor Md. on Feb. 23 2018
Secretary of Interior Ryan Zinke speaks during CPAC 2018 in National Harbor Md. on Feb. 23 2018

As a result, OPEC's crude oil capacity will grow by just 750,000 bpd by 2023.

"We maintain that firming global demand and weaker supply growth will support crude prices over 2018", the note added.

The IEA forecasts demand of 104.7 million barrels per day in 2023.

Demand for OPEC crude will remain below current output in 2020 at 32.0 million bpd, only rising above it in 2021 when the call on OPEC will increase to 32.60 million bpd, the IEA said. "Unless there is a change to the fundamentals, the effective global spare capacity cushion will fall to only 2.2 per cent of demand by 2023, the lowest number since 2007", the IEA stated.

“Global economic growth is lifting more people into the middle class in developing countries and higher incomes mean sharply rising demand for consumer goods and services, ” the IEA said.

But although Monday was good for crude prices, and despite comments from experts such as Pavel Molchanov, an energy research analyst at Raymond James (who stated that "The trend in global inventories shows that the market is fundamentally under-supplied and that emphatically remains the case"), the specter of full-out production on many global fronts remains a real concern.