Crude Oil Supply And Demand Chart

Crude Oil Supply And Demand Chart
Crude Oil Supply And Demand Chart Image link: https://en.wikipedia.org/wiki/List_of_recessions_in_the_United_States
C O N T E N T S:

KEY TOPICS

  • The article discusses how the price relationship between crude oil and natural gas has evolved over time and the economic mechanisms behind their linkage from the supply and demand prospectives.(More...)
  • Brent crude oil spot prices averaged $74 per barrel (b) in July, largely unchanged from the average in June.(More...)
  • These factors suggest that displacement due to gas-to-oil switching is a shrinking factor in determining the price relationship between natural gas and crude oil in terms of demand.(More...)
  • High U.S. oil production could also put a dampener on the crude rally, added Kilduff, potentially negating the benefits of a deal among Organization of Petroleum Exporting Countries (OPEC) to restrict supply even further.(More...)
  • By remaining flat in real terms, gasoline and diesel prices have failed to keep pace with overall U.S. price inflation, which is a great deal for consumers and made possible largely because of the U.S. energy renaissance and the abundance of domestic crude oil, which makes up more than half of the cost to produce gasoline.(More...)
  • Even more importantly, rising demand will help relieve any excess supply produced by American shale oil producers.(More...)
  • The demand and supply shocks that we obtain are shown in the chart below.(More...)
  • Per-barrel costs for crude oil - the No. 1 factor in the cost of producing gasoline and diesel - have risen due to a tighter global oil supply/demand balance and lower inventories compared to last year.(More...)
  • Demand for oil products directly impacts demand for raw crude oil itself since crude oil is the raw material.(More...)
  • Brazil recently entered a new growth cycle in crude oil supplies while the oil price was high and is expected to show more growth in their crude oil supplies for the next few years.(More...)
  • It is now believed that it requires operation of several oil rigs and some time before Libya again will reach oil supply levels prior to the war.(More...)
  • The Permian was responsible for approximately 63 percent of U.S. crude oil production growth in 2017, far outpacing the next-most-prolific U.S. shale formation, the Bakken in North Dakota and Montana (which accounted for approximately 18 percent of U.S. crude oil production growth).(More...)
  • I think these analysts may be underestimating the strength of the global demand for crude oil.(More...)

POSSIBLY USEFUL

  • Besides lowering its demand outlook, stronger prices also prompted the IEA to increase estimates for supply from OPEC’s rivals, particularly the U.S. Production outside the Organization of Petroleum Exporting Countries will grow by 1.87 million barrels a day this year, or 85,000 a day more than previously thought.(More...)
  • By comparison, OPEC's previous forecast (shown below) predicted U.S. crude volumes to reach an inflection point in mid-2018 and decline during the second half of 2018.(More...)
  • The build-out in oil drilling and production is expected to stimulate an increase in associated gas.(More...)
  • As China's production has decreased, its demand for coal imports has increased. 54 The tightening global supply for coal created a brief but significant upturn at the end of 2016 in U.S. coal export prices.(More...)
  • Initially, spot prices rose more than longer- dated prices, indicating that the market believed that the rise in longer-dated prices gave enough incentive to the global majors to bring on new supply over the medium term, while higher spot prices were needed to ensure that demand would not grow too fast in the meantime.(More...)

RANKED SELECTED SOURCES

KEY TOPICS

The article discusses how the price relationship between crude oil and natural gas has evolved over time and the economic mechanisms behind their linkage from the supply and demand prospectives. [1] Crude oil and natural gas prices have historically moved in tandem as a result of the linkage between the two commodities on the supply and demand sides. [1]

The chart below provides a snapshot of West Texas Intermediate (WTI) crude oil prices compared with the market's supply/demand balance (positive implies a surplus, where supply exceeds demand), measured in million barrels per day. [2]

A squeeze in supply and resilient demand could tip the scales and push crude oil prices sharply higher, says Robert Raymond, investment strategist at hedge fund RCH Energy. [3]

As shale makes up an increasing percentage of global crude oil supply, the challenge will be to find ways to increase shale well productivity, overcome input shortages and ramp up production to meet incremental global demand growth. [4] Because crude oil is priced in U.S. dollars, the dollar's appreciation stimulates supply and dampens demand, contributing to a fall in price. [5]

The Global Oil Supply and Demand Outlook can be purchased in 3 different formats: medium-term outlook (next 3 years), long-term outlook (to 2030), or a combination of both. [6] Combining data and insights from a suite of energy market forecasting models, our outlook focuses on the impact of key drivers on the pace and timing of oil price recovery, the evolution of regional oil production (including shale oil), and the economic implications of long-term market trends for oil supply and demand. [6]

It now expects crude oil to average $100 per barrel over the next two Last year's forecast estimated that a 2030 The oil guru who predicted the decline of crude oil in 2014, also predicted the price return to $ 100 within five years or 2020, in case a fluctuating supply fails to meet the demand. [7] Those changes are determined in the global crude oil market by the worldwide demand for and supply of crude oil. [8] The identification scheme is comparable to that suggested in Caldara, Cavallo, and Iacoviello (2016), putting restrictions on short-term oil supply and demand elasticities based on a survey of the literature. [9] Our model can be used to decompose changes in the real price of oil into an amount due to changes in demand and an amount due to changes in supply. [10]

Since OPEC and Russia together cut 1.6 MBD of oil supply beginning in Q3 2016, the EIA has estimated that global oil demand has outpaced supply for six of the past seven quarters. [2] Over the course of 2014 and 2015, WTI crude oil prices declined 62 percent, yet global crude production continued to grow, peaking in December 2015 at 81 million barrels per day. 18 The glut in supply coincided with shrinking global demand, further boosting global crude oil inventories. [5]

That helps the market now, but who?s going to supply the growth in crude oil demand needed in 2019, 2020 and 2021? We believe the U.S. will provide at least 75%, but it?s not clear which countries can supply the remainder. [11]

Dallas Fed economists believe that global oil supply and demand are now in relative balance. [4]

Economics tells us that demand goes up when prices go down, so for the market supply and demand to re-equilibrate the global oil price consequently generally rises when the dollar falls, and vice versa. [2]

Brent crude oil spot prices averaged $74 per barrel (b) in July, largely unchanged from the average in June. [12] High production levels and weak demand for oil set off a crude selloff in late 2014 that stretched through to early 2016. [3] Crude oil hit its highest level in more than three years to start 2018, but one market watcher expects these gains to be short-lived. [3] Crude oil blazed through the first few weeks of the year, as signs of a supply-demand balance set off commodities bulls. [3] Market conditions do not currently support crude oil above $60 a barrel, says John Kilduff, partner at Again Capital and a veteran market watcher. [3] As before, OPEC's report implies a price-favorable outlook for the supply/demand balance for crude oil in 2018. [13] Crude oil last settled as low as $55 in November, and closed above $63 in Friday's trading. [3] "We're certainly out of the woods that we were in 18 months ago or so when there was abject oversupply of crude oil and refined products," said Kilduff. [3] Goes without saying that U.S. production is not the only uncertainty that will impact prices and supply/demand balance in the crude oil market this year. [13]

U.S. crude supply alone could surpass 10 million barrels a day -- beating out Saudi Arabia and Russia for the title of world's largest oil producer. [3] During that month, global demand for crude oil and other liquid fuels totaled nearly 101 million bpd, whereas supply fell short of 99 million bpd. [14] By the numbers: The IEA expects supply from outside of OPEC to grow by 1.5 million barrels per day next year, alongside similar growth in crude demand of 1.4 million. [15] That means it is crucial, when interpreting oil price movements, to know whether price changes reflect a change in oil demand, or a change in oil supply. [10] Since oil is a globally traded commodity, understanding oil prices requires a look at global supply and demand. [8]

These factors suggest that displacement due to gas-to-oil switching is a shrinking factor in determining the price relationship between natural gas and crude oil in terms of demand. [1] By mid-to-late summer refinery demand of crude oil starts to taper along with WTI prices. [16]

From the supply side, the crude oil and natural gas price linkage is mainly driven by the direct competition for drilling resources at the wellhead. [1] The prices of crude oil, gasoline and diesel fuel generally have moved in tandem, as the next chart shows. [2] Exactly what are consumers are paying for at the pump? By EIA estimates, as shown in the final chart below, crude oil accounts for 57 percent of every dollar spent on gasoline. [2]

The price for Brent crude oil, the global benchmark for the price of oil, was up 1.32 percent as of 9:15 a.m. EDT to $78.32 per barrel. [17] Accordingly, the demand for raw crude oil increases during the late-winter and early-spring months. [16] This statistic shows the daily demand for crude oil - including biofuels - worldwide from 2006 to 2017, and an estimated figure for 2018. [18]

High U.S. oil production could also put a dampener on the crude rally, added Kilduff, potentially negating the benefits of a deal among Organization of Petroleum Exporting Countries (OPEC) to restrict supply even further. [3] This outlook of relatively stable inventory levels over the forecast period contributes to a forecast of monthly average Brent crude oil prices remaining relatively stable between $70/b and $73/b, from August 2018 through the end of 2019. [12] EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019. [12]

OPEC anticipates that U.S. crude oil production will grow by 0.52 MMb/d from December 2017 to December 2018, mostly driven by shale. [13] OPEC's estimate for U.S. crude oil production falls far behind the most recent forecast by the EIA. [13]

By remaining flat in real terms, gasoline and diesel prices have failed to keep pace with overall U.S. price inflation, which is a great deal for consumers and made possible largely because of the U.S. energy renaissance and the abundance of domestic crude oil, which makes up more than half of the cost to produce gasoline. [2] As shown in Figure 1, crude oil and natural gas prices predominantly moved in synchronization prior to 2008 except for some periods in which natural gas prices spiked and moved independently of crude oil. [1] Crude oil and natural gas are major fuels in the global energy mix. [1] An increase in crude oil prices would likely encourage the substitution of natural gas for petroleum products, which would increase natural gas demand and then prices. [1]

Even more importantly, rising demand will help relieve any excess supply produced by American shale oil producers. [19] The bullish supply and demand story for oil has become pretty convincing. [20]

As from the start of 2017 OPEC(13) put into effect an agreed cut in supplies of 1,2 Mbo/d together with some concessions (of about 0,6 Mbo/d, according to public figures, from some non OPEC countries) in an effort to accelerate the balancing of supply and demand and regain support for the oil price. [21] The purpose of this essay has been to lay out the key factors the Dallas Fed closely tracks in analyzing the global energy markets and in considering the impact of oil prices on economic conditions in the U.S. Like any dynamic market, the oil market can be unpredictable, and key elements are often shifting, which can have profound impacts on global supply and demand. [4] A More Muted Impact of Higher Oil Prices on the U.S. Economy Increases in oil prices can be caused by higher-than-expected demand (so-called "demand shocks") from a stronger global economy or from unexpected reductions in supply (so-called "supply shocks"), such as those resulting from certain types of geopolitical events. [4]

"With just under half of global oil supply subject to restraint and oil demand growing steadily, the impact ? has been substantial," it said. [22]

OIL PRICE OUTLOOK ? FEBRUARY 2017 FORECASTS 19 OIL DEMAND AND SUPPLY FORECASTS By 2020, almost one-half of low crude oil prices have sharply curtailed capital expenditure programs among integrated oil The crude oil price started 2018 with a BANG, rising from an opening $60 to a January peak of $67, that's a 12% gain in less than 1 month! Here is my latest Cuba Crude Oil Refinery Outlook to 2020. [7] The United States added more than 2.2 MBD of new crude oil production in just 4 years - meeting more than half of global oil demand growth over the period. [2] In 2010, global crude oil demand was 86.4 million barrels per day. [18]

Natural gas and crude oil are both extremely important to the U.S. economy. [1] Some refined fuels produced from crude oil are competitive substitutes to natural gas. [1] The summer driving season is arriving, so it's a good time to take stock of recent market dynamics that have raised per-barrel costs for crude oil and consequently gasoline and diesel fuel. [2] This apparent departure from the norm may have been attributed to the changes that affected the substitution and competition linkage between natural gas and crude oil. [1] Following the OPEC meeting last week, WTI crude oil futures have exploded higher. [16] This is a great benefit for consumers, made possible largely because of the abundance of domestic crude oil, which makes up more than half of the cost to produce gasoline. [2] Few could have predicted at the time that the most bullish fundamental story in the history of crude oil would give way to $30.00 oil. [16] A survey of analyst expectations from S&P Global Platts revealed expectations of a drain on U.S. crude oil inventories of 4.5 million barrels last week, adding support to the concerns about a market deficit. Federal data are published Thursday, one day later because of a U.S. holiday. [17] U.S. crude oil stocks have fallen by nearly 100 million barrels since their peak at the end of March, or some 17%. [23]

Crude oil prices fell on Monday after Saudi Arabia said it could tap into its 2 million barrels per day in spare capacity to help address a pending market deficit. Three members of the Organization of Petroleum Exporting Countries -- Libya, Iran and Venezuela -- are posting real, or have expected, production declines. [17] With respect to natural gas extracted from an oil rig, an increase in crude oil prices may likely lead to an increase in associated gas production which would likely exert downward pressure on natural gas prices. [1] Any increase in crude oil prices motivates end-users to substitute natural gas for petroleum products in consumption where possible. [1] Petroleum inventories have fallen and WTI crude oil prices firmed recently to around $65 per barrel. [2]

Crude oil market prices are influenced by annual consumption patterns. [16] This implies that if the market prices of the two fuels were equal based on their energy content, the ratio of crude oil prices to natural gas prices would be approximately 6. [1] An increase in crude oil prices may lead to increase oil drilling which would decrease natural gas drilling, potentially leading to higher natural gas prices. [1] As depicted in Figure 2, the ratio averaged 8 from 2000- 2007, then started to increase at the end of 2008 in response to the significant decline of crude oil prices during the recession. [1] July 3 (UPI) -- Crude oil prices rose on Tuesday with the U.S. benchmark hitting a four-year high on expected drains in domestic inventories and outages in Libya. [17] The price relationship between natural gas and crude oil underwent a shift whereby natural gas prices strayed from oil prices following 2008. [1]

The demand and supply shocks that we obtain are shown in the chart below. [10] This implies a huge and ever widening gap between oil supply and the demand profiles. [24] Impediments to Growth of U.S. Shale Oil Production While estimates for growth of U.S. shale vary among industry observers, our contacts believe that U.S. shale production should be sufficient to supply a substantial portion of incremental global demand growth for the next few years. [4] What we mean is that a balance between supply and demand is forming, creating a floor for oil prices and room for them to expand higher. [19] Today, Dallas Fed economists believe that the recent run-up in oil prices is due to a combination of both demand and supply factors. [4]

The announcement of a crude oil supply cut from OPEC in late November pushed petroleum prices up 5.5 percent in December. [5]

In this week?s News in Charts we consider recent movements in the price of crude oil in the context of Fathom?s oil-market model. [10] The demand for crude oil is dependent on global economic conditions as well as market speculation. [25] The Organization of the Petroleum Exporting Countries? efforts since the start of last year to curb global production have had the biggest influence on crude values, along with growing demand for oil and Venezuela?s output woes. [26]

Higher global oil supply in June and a surprise increase in U.S. crude inventories in the week ending 27 July fostered bearish sentiment. [27] Note: West Texas Intermediate (WTI) Crude Oil, prices in USD per barrel (bbl). [27] Recently, that price has been between $60 and $70 a barrel, depending on the type of crude oil purchased. [8] With crude oil at these prices a standard 42 gallon barrel translates to $1.43 to $1.66 a gallon at the pump. [8] The biggest single component of retail gasoline prices is the cost of the raw material used to produce the gasoline - crude oil. [8] Crude oil is one of the most demanded commodities and prices have significantly increased in recent times. [25] The differences between WTI and Brent include not only price but oil type as well, with WTI producing crude oil with a different density and sulfur content. [25]

The economic factors linking natural gas and crude oil markets through substitution and competition effects would suggest they are connected through a long-run relationship. [1] Prices for crude oil imports rose 27.6 percent in 2011, as global growth pushed demand. [5] When the price of heating oil or gasoline outperforms the price of crude oil it is a very bullish signal - a sign of stronger demand. [20]

Oil supply is substantially comprised of three main segments: crude oil, natural gas liquids and biofuels. [4]

Uncertainty about supply and demand is adding volatility and remains a key issue for the oil market now. [11] In October 2016, reports of inventory drawdowns for gasoline and distillates (which include diesel and heating oil) helped push crude prices up globally. 28 However, global production increased in November, leading to excessive crude supply and inventories, which pushed down the average WTI price. [5] Donald Trump?s withdrawal from the Iran nuclear deal has raised concerns that the global supply of oil will be squeezed, pushing up the price of Brent Crude on Wednesday by almost 3% a barrel to $76.95. [22]

Per-barrel costs for crude oil - the No. 1 factor in the cost of producing gasoline and diesel - have risen due to a tighter global oil supply/demand balance and lower inventories compared to last year. [8] At the end of August, combined stocks of crude oil and refined products in industrialized countries were slightly over 3 billion barrels, dropping down to 170 million barrels above the five-year average, a sign of progress in clearing the global glut. [15] WTI Crude Oil traded on 3 August at USD 68.5 per barrel, which was 7.7% lower than on the same day last month. [27] In this post I present developments in world crude oil (including condensates) supplies since January 2007 and per July 2017. [21] In this post the world crude oil (inclusive condensates) supplies is split into three entities, North America, OPEC(13) and other Non OPEC with a closer look at Brazil. [21] Figure 01: Figure 1: The stacked areas in the chart above shows changes to crude oil supplies split with North America, OPEC and other non OPEC with January 2007 as a baseline and per July 2017. [21] Figure 03: The stacked areas in the chart show crude oil supplies from North America versus the oil price (Brent spot) from January 2007 - July 2017. [21] Figure 02: The stacked areas in the chart shows development in crude oil supplies split on some economic entities from January 2007 and per July 2017. [21] Figure 08: The chart shows crude oil supplies from Libya versus the number of oil rigs since January 2007. [21]

WTI Crude Oil prices were stable in the mid-USD 70 range in early July before falling on 11 July when OPEC?s Monthly Oil Market Report showed that the organization?s members had collectively ramped up supply in June. [27] Crude oil costs account for about 57 percent of what people are paying at the pump. [8] Crude Oil is a naturally occurring liquid fossil fuel resulting from plants and animals buried underground and exposed to extreme heat and pressure. [25] Two major benchmarks for pricing crude oil are the United States' WTI (West Texas Intermediate) and United Kingdom's Brent. [25]

The restriction we apply is that only shocks to oil supply can have a permanent effect on the level of oil consumption. [10] The model identifies large negative shocks to oil supply in 1974, then again in 1979 and 1980. [10]

Demand for oil products directly impacts demand for raw crude oil itself since crude oil is the raw material. [20] When demand for oil fell during the Great Recession, the U.S. benchmark price--the West Texas Intermediate (WTI) crude oil price--fell to a monthly average low of $39 per barrel in February 2009. 12 Subsequent improvements in the global economy and low interest rates pushed oil prices upward from 2009 to 2011. [5]

The visualisation below shows the crude oil spot prices across various oil blends, as measured in US$ per terawatt-hours (rather than per barrel) for comparison to energy prices of coal and natural gas below. [28] The U.S. Bureau of Labor Statistics (BLS) all-commodities import and export price indexes are calculated using the U.S. Bureau of Economic Analysis (BEA) detailed end-use classification system. 10 The BEA end-use category of fuels and lubricants includes crude oil, refined petroleum and petroleum products, coal, and natural gas. [5] In 2016, the import price index for crude oil rose 32.7 percent over the year and was the largest contributor to the increase in U.S. import prices overall. [5] Chart 2 shows the growth in shale crude oil output in the U.S. Less than 10 years ago, U.S. shale produced approximately 0.5 million barrels per day, or less than 1 percent of global crude oil production. [4] The chart below shows the crude oil price (measured in 2015 US$ per barrel) versus global oil consumption, measured in barrels per day. [28]

On February 11, WTI spot prices for crude oil fell to $26.19 per barrel, a 15-year low. 23 The low crude prices made it increasingly difficult for oil companies to remain profitable and may have deterred investment in future exploration. [5] Prices then dipped in July and August, as global crude oil inventories were at record levels. [5] In the first 2 months of the year, prices for import crude oil continued the downward trend of the past few years, declining 22.9 percent. [5] While crude oil is quite flat year on year the prices of both heating oil and gasoline are up significantly. [20] Similar price fluctuations were reflected in the U.S. import price index for crude oil. [5] Crude oil, petroleum and petroleum products, natural gas, coal, and other fuels compose the fuels and lubricants price index. [5] Similar to import prices for crude oil, export prices for petroleum products gained over the second quarter, going up 29.8 percent. [5] The 2014 and 2015 declines were largely due to the crash in crude oil and petroleum prices and the appreciating dollar. [5] The 2012 decline marked the first calendar-year drop in crude oil import prices since the Great Recession. [5] Crude oil is a major component of import prices, and export prices are heavily weighted towards refined petroleum products. [5] With the price of crude oil not rising nearly as much that has blown out heating oil processing spreads. [20]

When crude oil prices increase, the demand for natural gas and other alternative fuel sources rise. [5] Higher crude oil prices, warmer weather during the summer months, expectations for a colder winter, and increased industrial demand from companies shifting from coal to natural gas all contributed to higher prices for natural gas exports. [5]

Brazil recently entered a new growth cycle in crude oil supplies while the oil price was high and is expected to show more growth in their crude oil supplies for the next few years. [21] Changes in gasoline and diesel prices mirror changes in crude oil prices. [8] Crude oil prices are commonly measured in USD. Although there have been discussions of replacing the USD with another trade currency for crude oil, no definitive actions have been taken. [25] This page provides the latest reported value for - Egypt Crude Oil Production - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news. [29] Crude Oil Production in Egypt averaged 708.29 BBL/D/1K from 1994 until 2018, reaching an all time high of 930 BBL/D/1K in November of 1996 and a record low of 560 BBL/D/1K in January of 2018. [29] Crude Oil Production in Egypt remained unchanged at 560 BBL/D/1K in May from 560 BBL/D/1K in April of 2018. [29]

Annualized and YTD 2017, only OPEC(13) has shown growth in crude oil supplies and this is after the agreed cuts was implemented as from the start of 2017. [21] Figure 06: The stacked areas show development in crude oil supplies from OPEC(13) and the color coding and grading for individual countries. [21] Crude oil supplies from the U.S., buoyed by unprecedented amounts of debts for Light Tight Oil (LTO) extraction, reached a high of 9,6 Mbo/d in April 2015 and was about 0,4 Mbo/d lower in July 2017. [21]

While the U.S. continues to be a substantial crude oil importer, the shale boom has allowed our country to substantially reduce the percentage of petroleum product consumption that is supplied by imports. [4] The crude oil and petroleum market responded to global market fundamentals rather than exchange rate pressures. [5] Over the past 15 months, Orbital Insight has continued to observe interesting changes in year-over-year comparisons of global crude oil storage in floating roof tanks. [30] In OPEC specifically, there are mixed results in terms of crude oil inventory levels over the past year. [30] Today, crude oil is the largest energy source, accounting for around 39 percent of fossil energy, followed by coal and natural gas at 33 and 28 percent, respectively. [28] Our current estimate for the amount of crude oil stored in floating roof tanks globally is 2.6bn barrels, as compared to 2.7bn barrels at this time in 2017. [30] We now track more than five billion barrels of crude oil storage capacity across more than 1,000 tank farms globally. [30] Rail companies are carrying more crude oil now in the U.S. than they were in 2016, which was the peak. [11] The challenge is to ship crude oil to the U.S. Gulf Coast to be processed and exported. [11] The term "oil" refers to crude oil, condensates, natural gas liquids and biofuels. [4] Shale oil is a relatively light oil and does not yield as much middle distillate as heavier oils (from, for example, Middle East or Venezuela crude oils) in the refining process. [4] As shown, coal was the first and only fossil source until the 1860s when crude oil consumption began. [28] In this essay, when the term "crude oil" is used, it refers to crude oil and condensates. [4] An oil processing spread (crack spread) is the margin that a refiner can make while processing raw crude oil into refined products like gasoline and distillates. [20]

These projects are important to global energy markets because they fundamentally increase medium- and longer-term global oil supply. [4] In June, OPEC decided to increase output again and its members now are starting to add oil supply to the market. [11]

Peak oil supply fears have been replaced with peak oil demand concerns. [31] The simple mechanics of pricing, supply, and demand need only to do their thing and the result will be a drop in oil prices that justifies the use of words like "collapse." [32] There's a widespread assumption that supply and demand drive oil prices. [33]

It is now believed that it requires operation of several oil rigs and some time before Libya again will reach oil supply levels prior to the war. [21] We believe any real impact from a reserve release would be temporary and would not be a game changer for total oil supply. [11] Of all the products in the fuels category, petroleum carries the greatest weight. 11 In order to fully understand the impact of the large petroleum price increases in 2016, it is important to examine trends in the crude oil market over the past few years. [5] The aggregate "fuels and lubricants" price index incorporates crude oil price changes, and other fuels that account for a larger share of U.S. export trade value, such as refined petroleum products and natural gas, are affected by the price changes in the crude oil market. [5] Prices for U.S. petroleum exports plummeted during the collapse in global crude oil prices, although they continued to trend slightly above crude oil prices. [5] In 2017, U.S. shale produced approximately 4.7 million barrels per day and made up approximately 6 percent of global crude oil production. [4] In terms of crude oil production, only Russia, which currently accounts for approximately 11 million barrels per day, produces more than the U.S. By comparison, Saudi Arabia currently produces approximately 10 million barrels of crude oil per day, having cut approximately 0.5 million barrels per day from its crude oil production as a result of the OPEC agreement. [4] These estimates incorporate the December 2016 agreement made by the Organization of the Petroleum Exporting Countries (OPEC) and other oil-producing countries to cut crude oil production by approximately 1.8 million barrels per day. [4]

Overall, global production flattened and expectations of curtailing output from major oil-producing countries sparked a recovery for crude oil prices. 26 This coincided with a short period (February to April) of depreciation for the dollar. [5] Global market factors pushed crude oil prices higher despite downward pressure from a stronger U.S. dollar. [5] The global recovery in crude oil prices and a stronger U.S. dollar put downward pressure on nonferrous and other metals export prices in the second half of 2016. [5] Volatility is the nature of the oil price and continued volatility is likely in the next year - especially in the price spread between U.S. shale oil and West Texas Intermediate crude oil, the U.S. benchmark. [11] Improved global economic conditions, steady production of crude, and the potential for future reductions in crude oil production facilitated the recovery for crude oil prices in 2016. [5] The economic factors that influenced global crude oil prices have had roughly the same affect on export petroleum prices. [5]

In 2016, crude oil prices were US$43.73 per barrel - this represents a 275 percent drop in prices from 2011 when prices close to an all-time high at US$118.71. [28] In 2014, as crude oil prices began to decrease, prices for imports followed suit, declining 31.9 percent over the year. [5] Trending with crude oil prices, import prices rose 0.4 percent in March, the first monthly increase since June 2015. [5] Crude oil production rose 73 percent, from 5.6 million barrels a day in September 2011 to 9.6 million barrels a day at its peak in April 2015. 14 In October 2013, domestic crude oil production surpassed crude oil imports for the first time since February 1995. [5] U.S. crude oil production is estimated to have grown from 5.1 million barrels per day in May 2008 to approximately 10.6 million barrels per day in May 2018., As a result of this growth, the U.S. now represents approximately 13 percent of global crude oil production, up from 7 percent 10 years ago. [4] After declining from a high of 1.6 million barrels per day in January 2011 to zero in August 2011, Libyan crude oil production moved back up to roughly 1.0 million barrels per day in May 2018. [4]

U.S. import prices stalled in 2012 and 2013, before falling crude oil prices pulled the price index down even further in 2014 and 2015. [5] Crude oil prices rebounded after hitting a 15-year low in February 2016, which proved to be the pivotal catalyst driving higher prices for overall U.S. imports and exports. [5] This relationship exists because these precious metals are generally considered safe-haven investments, attractive during economic downturns but less appealing during periods of economic stability, when the dollar is generally strong. 8 Crude oil prices are similarly affected, tending to fall when the dollar is strong. [5] When WTI crude oil prices were trading over $105 back in 2014, oil producers tried to produce more oil to take advantage of the triple-digit price. [19] One of the most popular ways to play rising oil prices is to buy crude oil futures contracts. [19] Impacts of OPEC's political risk on the international crude oil prices: An empirical analysis based on the SVAR models. [28] Crude oil prices and exchange rates tell much of the story. [5] Higher crude oil prices also had a positive impact on prices for soybeans because of the role of soybeans in the biofuel sector. [5] Although a highly effective method, horizontal wells often reach peak crude oil production in the first few months, with output declining rapidly thereafter, sometimes as much as 80 percent after one year. [4] As mentioned above, our Dallas Fed industry contacts believe that there are a number of challenges to continued robust growth in shale crude oil production in the medium term. [4] The recent U.S. withdrawal from the Iran nuclear agreement has the potential to reduce Iranian exports and crude oil production. [4] Daily Venezuelan crude oil production is estimated to have fallen by 1.1 million barrels since 2013 and is continuing to decline. [4] Recently, OPEC and other oil-producing countries have discussed restoring some of this crude oil production cut. [4] In order to grow overall crude oil production, more wells must be drilled and well productivity must be boosted substantially. [4]

Production Outages and Geopolitical Risks A large percentage of global oil production is in politically unstable areas of the world, and political and military conflict as well as governance challenges have given rise to oil supply disruptions in the past several years. [4] They entered Crude oil will trade from $35 to $55 per barrel until 2020. have raised their forecasts for the crude price of the Oilfield Services Market Report: Global Trends & Forecast to 2020 for the $ a CAGR of 5. 86 +0. production outlook for 2018. 15 U. Latest News on Oil, Energy and Petroleum Prices. 8: 63. 2015 2016 2017 2018 2019 2020 2020; 50. [7] Suncor produced 425,000 bpd of upgraded crude oil in the first Summer forecast: The price of Brent crude oil will average $75 per barrel next year, according to the latest forecast from oil and gas $65 per barrel in 2020 and $67. [7]

Peak oil demand signals a break from a past dominated by concerns about adequacy of supply. [24] On top of all this, there is a growing mismatch in crude oil quality and refinery demand. [31] Demand is so strong that crude oil inventories have been falling sharply for months. [14] Not just any forecast, We believe the decline in oil prices and potential lower-for-longer environment Global Oil and Gas Pipeline Leak Detection Market Forecast and Opportunities, 2020 - Crude Oil Prices Influencing Investments in Pipeline Infrastructure Demand for diesel and jet fuel will help push Brent crude oil prices to $90 a barrel in 2020, according to Morgan Stanley. [7] Energy Information Administration on Wednesday raised its price forecasts on West Texas Intermediate and Brent crude oil for this year and next, and lifted its U. oil prices would need to fall to $US0 per PIRA forecasts a jump in global oil demand of about 1. [7]

The Permian was responsible for approximately 63 percent of U.S. crude oil production growth in 2017, far outpacing the next-most-prolific U.S. shale formation, the Bakken in North Dakota and Montana (which accounted for approximately 18 percent of U.S. crude oil production growth). [4] In late 2011, U.S. crude oil production rose as a result of both increased pumping of traditional oil wells and the growth of hydraulic fracturing and horizontal drilling technologies that provide access to previously unattainable oil reserves. [5] It is our view, based on Dallas Fed analysis, surveys and discussions with industry contacts, that U.S. crude oil production will grow by more than 1 million barrels per day in 2018 and exceed approximately 11.2 million barrels per day by year-end. [4]

I think these analysts may be underestimating the strength of the global demand for crude oil. [14] By 2025, the average price of a barrel of Brent crude oil will rise to $85. [7] IEA forecasts OECD Crude oil import costs, 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Price Forecast. [7] Cryptocurrencies; Bitcoin Price Crude Oil Commodity Forecast, "CL" Predictons for2020. [7]

For now, there is enough global capacity for light sweet crude oil to deal with growing U.S. exports, but if more than 100% of global production growth is going to be light sweet crude and NGLs, at some point the issue can no longer be exported away. [31] China's crude oil output will fall 7 percent by 2020 high-cost fields as producers scale back production in a lower oil price forecasts a decline of Banks raised their oil-price forecasts for the fourth month in a row in January, as rebalancing in crude supply pushed prices to Banks Raise Oil Forecasts but 2020 62. [7] Who knew? After the rapid decline in crude oil prices from mid-2014, Worldwide tight supply of crude oil and price crisis in 2004 have aroused concern in Chinese society for how much 2001-2020 crude oil consumption forecast Goldman?s Bearish Crude Oil View to 2020. dollars per barrel in 2017. [7]

Please consider supporting us by disabling your ad blocker. 92 per barrel as of March 15, Current Forecast of U. Current Forecast of U. This page provides a five year chart and a forecast for Crude Oil Prices. 4 million barrels per day of crude oil forecasts for Canadian Why is the crude oil price increasing in January 2018? about the rise in crude oil prices. [7] Crude Oil Prices - Live Oil Price Chart, Price Forecast. price shock the global price of crude oil is for oil -- oil prices are forecast to rise 4 Wildly Different Oil Price Scenarios For 2020 could put a ceiling on the price of crude for the for oil prices, but the forecasts for what Booming shale industry cast as threat to cartel?s efforts to raise prices. [7] This page includes historical crude oil price data and historical trend charts. 39: Feb 2020 Deloitte's oil and gas price forecast takes into account many Brent crude oil prices are forecast using futures data from the International Commodities Crude oil prices rose more than 40% since the lows in February 2016. [7]

During the last 12 months, the global production of crude oil has consistently fallen short of the Department of Energy?s forecasts. [14] Platts Oil helps to develop, connect & explain the market price of crude oil and oil products. [7] A large share of production is not even crude oil but NGLs (Natural Gas Liquids) which are processed in petrochemical plants rather than refineries 8. [31] Demand for diesel and jet fuel will help push Brent crude oil prices to $90 a barrel in 2020, according to Morgan Stanley. [7] Between 1970 and 1973 U.S. imports of crude oil had nearly doubled, reaching 6.2 million barrels per day in 1973. [34] All new crude coming from Canada - which was supposed to be the life saver of the U.S. refining industry - was heavy crude oil from oil sands. [31] Crude oil will trade from $35 to $55 per barrel until 2020. [7]

U.S. crude production accounts for only about 11% of global supply and shale oil for about 6%. [31] The emergence of U.S. tight oil as a major new source of global oil supply does not significantly affect this analysis. [24]

Suncor produced 425,000 bpd of upgraded crude oil in the first Summer forecast: WTI to jump to $94. [7] Colombia Crude Oil Refinery Outlook To 2020 is a comprehensive Historic and Forecast of Oil Exports (mbd), 2000-2020 11. [7] Rep Uneven distribution of crude oil and natural gas http://tinyurl. [7] The fact is that the Elliott wave model helped EWI call "every major turn in crude oil since 1993." [33] The electric vehicle revolution is another variable that some analysts believe will boost supplies of crude oil. [14] Even though for historical reasons NGLs are counted as crude oil in crude oil balances (because petrochemical plants would switch between petroleum products and NGLs as feedstock), NGLs can?t be turned into gasoline and diesel at this point, only into plastics. [31] Permanently high inventories would imply that the crude oil curve would be in Contagno all the time. [31] Summary "Cuba Crude Oil Refinery Outlook to 2020" is a comprehensive report on crude oil refinery industry in Cuba. [7] Find information for Crude Oil Futures Quotes provided by CME Group. [7] U.S. Crude Oil Field Production is at a current level of 11.00M, unchanged from 11.00M last week and up from 9.53M one year ago. [35] Therefore, assuming global economic conditions remain buoyant, crude oil demand should continue to rise. [14] Law And "Higher global crude oil prices are net negative for the Indian off 10 basis points from its 7. cost competitive by 2020 CRUDE OIL PRICE FORECASTS Brent, $ per barrel, avg U. Articles, Analysis and Market Intelligence on the Oil, Accurate Oil Price Forecasts We use reliable models for long-term forecasting crude oil prices and precious metals Natural Gas Price Forecast 2018, 2019, 2020. 1/2020. [7]

Global Crude Oil Pipelines Market 2016-2020: Technavio's analysts forecast the global crude oil pipeline market to Global crude oil price over the The latest issue of FGE?s Long Term Global Oil Market Outlook, then translated into price forecasts for the view that crude oil prices are an integral part Don?t look for a sharp recovery in the crude oil price any time soon, it?s likely to oscillate between $35 to $55 per barrel for the remainder of the decade. [7] Credit Suisse lowered its long-term price forecast for U. SELECT A Malaysia Crude Oil Production Forecast, 2000-2020 Peru Crude Oil Refinery Outlook to 2020 Price: Single User - Facilitate decision making on the basis of strong historic and forecast The Iran Oil & Gas Market Forecast includes historical and forecast Brent Annual Average Spot Price Forecasts, 2010-2020 2017 Iran Crude Oil Refinery Daily Crude Oil Futures Prices. [7] The pricing mechanism for Brent dictates the value for roughly two-thirds of the world's crude oil production. of OPEC?s oil cuts and higher non-OPEC production will eventually pull down Brent prices to $60 a barrel by 2020. 7: 66. 6: 67. [7] Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2015 - 2020 the plummeting prices of crude oil and the industry $50 oil price may be magic number for market balance 2017 crude-oil price forecast a barrel WTI oil in 2020. [7] Intraocular Lens Market Global Industry Analysis and Forecast Till 2020. 39: Feb 2020 Oil price forecasts depend on the interaction between supply the nominal price of Brent crude will increase to $51. [7] The increases in crude oil price will follow a decline between 2007 and 2014, when world Crude Oil Price Forecast in 2004 Dollars, 2004-20 The U. The International Energy Agency on price of Brent crude oil Analyzing the Future of Oil meaning the drop-off is unlikely to push global crude prices The IEA forecasts double-digit prices through 2020. [7] OIL PRICE OUTLOOK ? FEBRUARY 2017 FORECASTS 19 Oil guru Gary Ross tips $US100 crude oil by 2020. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price rout since the financial crisis. [7] Oil Price Forecas. government on Tuesday forecast domestic crude production will rise even more than expected a year ago, undeterred by the worst price ro Colombia Crude Oil Refinery Outlook To 2020 is a comprehensive Historic and Forecast of Oil Exports (mbd), 2000-2020 11. [7] Crude Oil Price Ten Year Forecast to 2020 Commodities / Crude Oil Dec 08, 2010 - 03:06 AM GMT. Oil prices rose the following day in response as Iran may find it difficult to export crude oil. [7]

Importantly, U.S. production was already bumping into physical constraints back then; Despite billions of dollars in infrastructure investments, pipelines, tank capacity as well as fracking sand capacity could barely keep up with regional crude oil production growth, which repeatedly led to sharply discounted local crude oil prices and massive cost inflation. [31] To put that into perspective, U.S. total crude oil production would have to grow by over 10% p.a. on average for the next five years meaning that shale oil production would have to grow by close to 20% per annum. [31] Oil predictions for today, tomorrow, this week and month. 70/b Oil production will rise until 2020, Crude Oil Price Forecast. $ By group, in terms of SDRs; A "New Normal" for the Oil Market. [7] The latest issue of FGE?s Long Term Global Oil Market Outlook, then translated into price forecasts for the view that crude oil prices are an integral part $300 Oil by 2020: Scary but Unlikely. news. [7] Building a better crude oil price Crude Oil price outlook 2020 report every year that updates their base case for long and short term oil price forecasts. [7] By: Andrew_Butter "Prediction is extremely difficult, especially about the future": Niels Bohr Where Will Oil Prices be in 2020? both discovery of new oil and discovery of new technologies for producing crude oil equivalent and crude oil substitutes from Oil Price Forecast; Oil Welcome to browse the page of WTI Crude Oil Price Futures which shows the current WTI crude oil price Jan 2020: 63. [7] Crude Oil Imports and National The Conceptual Framework Consider the crude price by 2020 in New Crude Oil Substitutes Total 2) EIA Crude Oil Price Forecast Crude Oil Prices: Key Support and Crude oil price forecast. [7] Price forecast by day maximum and minimum prices. 5 The higher crude oil prices are, crude oil price will decrease from $105/barr. [7] Interestingly, Crude oil prices sold off sharply into the announcement by President Trump that the U.S. was to abandon the Iranian nuclear deal. [31] S. Crude oil price outlook from The Economy Forecast Agency. [7] Even if oil This statistic displays the Brent Crude oil prices for 2014 to 2017, and provides forecast figures for 2018 and 2019. [7] OPEC?s basket of crude oils is This statistic displays the Brent Crude oil prices for 2014 to 2017, and provides forecast figures for 2018 and 2019. of the 10 largest exporters of crude oil in the world collapse in oil prices in Oil prices have indeed been rising in the United States. 10. 5 2020. 7/barr. [7] The crude oil prices are expected to increase The predicted U. 4. 35 : $2. [7] Crude oil prices rose more than 40% since the lows in February 2016. 50; 63. [7] Rising or falling gasoline prices will follow rising or falling crude oil prices. in 2012 to $98. [7] Global light sweet crude oil production was declining and most new projects in the pipeline would deliver heavy crude oil. [31] Overall there are a number of limiting factors which will pose great challenges for U.S. crude oil production growth over the next couple years. [31]

Chart 1 shows a range of forecast for oil demand over the next 25-30 years from a variety of public and private sector organisations. [24] Chart 1 also illustrates that even those projections that predict oil demand will peak during their forecast period, do not envisage a sharp drop off in demand. [24] The vast majority of the projections in Chart 1 expect the level of oil demand in 2035 or 2040 to be greater than it is today. [24]

POSSIBLY USEFUL

Besides lowering its demand outlook, stronger prices also prompted the IEA to increase estimates for supply from OPEC’s rivals, particularly the U.S. Production outside the Organization of Petroleum Exporting Countries will grow by 1.87 million barrels a day this year, or 85,000 a day more than previously thought. [36] OPEC members have largely complied with an output deal that has contributed to a correction of the global imbalance between supply and demand. [3] The rapid rise in output, particularly in the United States, could well outweigh any pick-up in demand and begin to push up global oil inventories, which are now within sight of their five-year average. [37] To meet demand we will need 97 million barrels per day of new oil. [38]

The agency's forecast has since evolved to recognize the strong production momentum gained by the U.S. shale oil industry in 2017. [13] Annual production growth in the Gulf of Mexico is forecast to be offset by declines in mature conventional oil fields. [13]

Consider this: just as the price of oil crashes due to EVs, etc. the fastest growing populations in the world, which are in the oil-rich middle east, will suddenly lose 90% of their income. [38] If we assume your estimate is right, which it isn't, Oil consumption growth rates are historically around 3% a year. [38] The author thinks that we have 150 years of oil left at current consumption rates. [38]

The IEA said oil prices, which briefly touched a high of $71 a barrel in January, could be supported even if U.S. production rises, provided global growth remains strong, or if unplanned supply outages persist. [37] The actual pace of global demand growth, inventory policy by customers in Asia, supply discipline within OPEC, production trends in countries like Russia and Venezuela, and political risks in unstable regions all will contribute to the ultimate outcome. [13] The Organization of the Petroleum Exporting Countries, along with other exporters such as Russia, have agreed to maintain a joint restriction on crude supply for a second year running in 2018, to force inventories to drain and support prices. [37]

By the year-end they were only 52 million barrels above the five-year average, with stocks of oil products below that benchmark, the IEA said. [37] Oil inventories across the world's richest nations fell by 55.6 million barrels in December to 2.851 billion barrels, their steepest one-month drop since February 2011, the IEA said. [37]

In terms of individual components, OPEC's report predicts solid exit-to-exit growth in the Permian but modest growth across other unconventional oil plays. [13] They have at about 12 million bpd and oil sands at about 4.5 million bpd as best as I can eyeball the chart. [38] If you are a significant country (China, India, Turkey, EU) with limited oil resources you need to transfer over to electric transportation as soon as possible while ensuring supplies as long as possible. [38] Spare oil capacity worldwide is bordering on critical levels. [3]

LONDON (Reuters) - The rise in global oil production, led by the United States, is likely to outpace growth in demand this year, the International Energy Agency said on Tuesday. [37] The Paris-based IEA raised its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd, after the International Monetary Fund upped its estimate of global economic growth for this year and next. [37]

The IEA estimates demand for OPEC's crude in 2018 will average 32.3 million bpd, after dropping to 32.0 million in the first quarter of the year. [37] Production of tight crude from the Eagle Ford, Niobrara and other shale plays, particularly STACK/SCOOP, is forecast to grow year-on-year by 0.09 MMb/d, 0.06 MMb/d and 0.08 MMb/d to average 1.20 MMb/d, 0.39 MMb/d and 0.41 MMb/d, respectively. [13] We must note that the balance in the crude market is hinged on OPEC leaders' commitment to restrain their production growth. [13]

The International Energy Agency (IEA) estimates that production growth in the U.S., Canada and Brazil would bump non-OPEC supply higher by 1.7 million barrels per day in 2018. [3] This upward supply revision follows an upward revision of 0.32 MMb/d a month ago when OPEC increased its expectations for production in the U.S., UK and Brazil, as well as reduced its decline estimates for Mexico and China. [13] OPEC output was largely steady at 32.16 million bpd in January and compliance with the supply deal reached 137 percent, due in part to declines in Venezuela, where economic crisis has paralyzed much of the country's oil production capacity. [37] Oil production outside OPEC nations fell by 175,000 bpd in January to 58.6 million bpd, but was still 1.3 million bpd higher than January last year, predominantly because of the 1.3-million-bpd year-on-year increase in U.S. output. [37] The U.S. tight sand oil production is 7 mbd (an unheard of number) but would need to increase by 7 - 10 times in twenty years. [38]

By contrast, the EIA's model is based on a scenario where oil prices retreat to ~$56 per barrel by mid-2018 and remain flat at that level for the remainder of the year. [13] A rally sent oil prices nearly 6 percent higher for the year, to trade at their best since December 2014. [3]

Sales, revenue and prices, power plants, fuel use, stocks, generation, trade, demand & emissions. [12] "Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018 their increase in liquids production could equal global demand growth," the IEA said. [37] It would take a 5-8 fold increase over current production to meet expected world demand. [38]

Population growth and growing demand for cars will most probably be replaced by most efficient public transport in cities of the developing countries. [38]

Crude has surged 133 percent since hitting a multi-year low of $27.30 a barrel in February 2016. [3] By comparison, based on secondary sources, OPEC's crude production in February 2018 declined to 32.19 MMb/d from 32.26 MMb/d in January, driven in great part by another big drop in Venezuela's volumes. [13] OPEC's latest report suggests that the market for crude will be undersupplied by ~0.4 million barrels per day in 2018. [13] "In just three months to November, (U.S.) crude output increased by a colossal 846,000 bpd and will soon overtake that of Saudi Arabia. [37]

OPEC revised its U.S. crude production forecast up by 0.14 MMb/d from the previous report. [13] The new forecast (the dark blue line on Graph 5-12) is less radical in the sense that it predicts a more or less consistent, albeit surprisingly slow, growth in U.S. crude volumes throughout the year. [13] U.S. crude output could reach 11 million bpd by the end of this year, according to estimates from the U.S. Energy Information Administration. [37]

Unfortunately, U.S. tight sand oil production is most likely going to peak in the next 5-8 years (with President Trump's term in office) and then decline. [38] The forecast continues to reflect an overly pessimistic, in OIL ANALYTICS ' assessment, view of U.S. oil production growth in 2018. [13]

In a tight market predicted by OPEC's forecast, oil prices are likely to remain firm and could potentially strengthen from their current levels. [13] One can envision scenarios where a material increase in volumes by OPEC following the expiration of the Agreement leads to a collapse in oil prices. [13] In its latest forecast, OPEC estimates world oil demand to increase by 1.6 MMb/d in 2018, little change from one month ago. [13]

The two forecasts are particularly divergent given their respective implications for oil prices. [13] This, however, is not necessarily the case: oil price rises have come to a halt and gone into reverse, and, according to our supply/demand balance, so might the decline in oil stocks, at least in the early part of this year." [37]

Here are the latest oil production numbers from the EIA. All data is in thousand barrels per day unless otherwise noted. [38]

The new forecast calls for non-OPEC supply growth of 1.7 MMb/d in 2018 to a total of 59.5 MMb/d. [13] On the supply side, non-OPEC supply forecast for 2018 was revised up by 0.28 MMb/d, "mainly due to higher-than-expected output in 1Q18 by 0.36 MMb/d in OECD (Americas and Europe), FSU and China." [13]

Whenever the cost of gasoline and diesel gets too expensive, it will begin to shrink the demand for everything else so much, that a recession will soon begin. [38] The estimate puts 2018 global demand growth at par with demand growth in 2017, which is now estimated at 1.6 MMb/d. [13] Oil demand from the commercial transport is sure to dive down by 70% - 80% as electric trucks and buses are expected to replace almost all fuel ones. [38] Oil demand grew at a rate of 1.6 million bpd in 2017, the IEA said in its monthly market report. [37]

For the past decade, the demand for residual oil for electricity production has contracted significantly for various reasons including: (1) the retirement of ageing petroleum generation assets, (2) the surge of new gas-fired combined cycle capacity turbines which have enhanced efficiency, (3) increased usage of natural gas in power generation due to low natural gas prices, and (4) environmental concerns which rise from high sulfur content of residual oil. [1] Spurred by the rapid growth of fracking in the United States and Saudi Arabia?s decision to keep producing large volumes of crude, the price of a barrel of oil lost more than two-thirds of its value in 2014-15. [39] West Texas Intermediate, the U.S. benchmark for the price of oil, was up 1.51 percent to $75.06 per barrel, its highest level since November 2014. [17] The psychological price level of $75 per barrel may also be a factor working against an aggressive upward price move for oil this week. [40]

The recent shale revolution has redefined the supply structure of the two fuel sources and has led to the decoupling of oil and gas prices. [1] Therefore, shale production has proved extremely important in the decoupling of oil and gas prices. [1]

Fostering U.S. oil and natural gas production has helped put downward pressure on the cost of crude and then fuel costs. [2]

On paper it is simple, an increase in supply should shift the supply line to the right and lower the price of oil. [16] In finance and economics courses, we are taught that market price is the result of supply and demand fundamentals. [16] Traders may be reluctant to push prices any higher in the absence of the next piece of market-critical news on the supply or demand front. [40] Both demand and supply have driven the steady recovery in prices. [39] When supply has exceeded demand, as it did from Q3 2014 through Q2 2016, prices fell as expected. [2] With solid global economic growth, however, coupled with supply cuts by OPEC and Russia, demand recently has outpaced supply, and inventories therefore have fallen. [2]

The November 30th agreement between OPEC and partners to extend their 1.8 million b/d production cut deal from March 2018 until the end of 2018 is meant to bring global stocks down to the five-year average and erase the glut built-up when oil was above $100. [23] Our continually improving shale business is the lid on oil (and natural gas) prices. [23] Why not: oil is the world's most vital source of energy, the most traded commodity, and prices have finally started to rise. [23]

U.S. gasoline consumption actually accounts for 10% of all global oil consumption, and our usage has risen every year since 2012, hitting a record last year. [23] OPEC and its allies have finally succeeded in their 16-month campaign to clear a global oil glut, with inventories falling below their five-year average for the first time since 2014, the agency said. [36]

Libya's National Oil Corp. on Monday suspended loading commitments at two oil depots and announced production was down by about 800,000 barrels per day, representing nearly all of its total capacity. [17] Geoffrey Craig, the oil futures editor at Platts, said the drain on U.S. inventory levels is in part because of higher domestic exports, which set a record for the week ending June 22 at 3 million barrels per day. [17] The biggest decline has come from Venezuela, where years of gross mismanagement of the state oil company has caused output to fall by more than half a million barrels per day (b/d) in the past year. [39]

By comparison, OPEC's previous forecast (shown below) predicted U.S. crude volumes to reach an inflection point in mid-2018 and decline during the second half of 2018. [13] The EIA data in this chart is through April and the National Energy Board data is estimated through December 2018. [38]

The build-out in oil drilling and production is expected to stimulate an increase in associated gas. [1] At the time, the majority of literature on the energy markets was focused on the infinite supply of oil and the idea that the world is nearly tapped out. [16] IEA now says that an expected 0.200 million b/d global oil surplus in the first half of 2018 could easily switch to a 0.200 million b/d deficit in the second half. [23] In 2017 global oil consumption rose by 1.6%, with the bulk of the additional fuel burned in Western economies and in China. [39] The good news for oil bulls, is that although still at historically high levels here, U.S. crude stocks continue to drop, reducing a global overhang. [23] Oil has a more geopolitical dimension and responds to global events. [1]

Energy I cover oil, gas, power, LNG markets, linking to human development. [23] The International Energy Agency cut forecasts for global oil demand growth in 2018 as the highest prices in three years put a brake on consumption. [36]

The exchange value of the dollar matters because oil is priced globally in U.S. dollars. [2] Iran, however, said it would be tough to erase its oil completely from the market by November, when U.S. sanctions snap back into place. [17]

This ratio is derived from the fact that one barrel of oil is equivalent to 5.85 MMBtu. [1] Residual fuel oil competes directly with natural gas in the electric power generation and industrial sectors. [1] The associated wells produce primarily oil with natural gas as a by-product. [1] The non-associated wells refer to the wells that produce just natural gas, sometimes with just a small amount of oil. [1] The crude-gas ratio remained strong until 2014, which encouraged drilling for oil instead of natural gas. [1]

Although trapped in the 19-21 million b/d range for over a decade, oil substitutes are few and far between. [23] On the weekly chart specifically, oil has completed what traders call a three outside up bullish reversal pattern. [40]

This tightening of global oil market conditions, coupled with the U.S. dollar depreciating by 3.8 percent versus currencies of its trading partners in Q1 2018, corresponded with oil prices having risen by more than $7 per barrel or about 13 percent in Q1 2018, compared with Q4 2017. [2] Although the global economy remains robust, oil prices have surged about 75 percent since last June, and “it would be extraordinary if such a large jump did not affect demand growth,” the IEA said. [36] We expect 5 key signposts will set the cost of the marginal barrel of oil in the long term: global oil demand, non-OPEC declines, North American shale oil, OPEC production, and new project costs. [6] In last month's report, the group provided its first estimates of 2019 oil demand in which it said that a solid economic background and an assumption of more stable prices are vital factors to global demand increasing by 1.4 million bpd in 2019. [40]

This in turn increases natural gas demand and hence prices. [1] An increase in demand should shift the curve right to put upward pressure on price. [16] Seasonal variation historically has led to higher fuel demand and prices during the summer driving season, which the Energy Information Administration (EIA) defines as April through September. [2]

However, the supply and demand curves aren't straight lines, nor are they convex. [16] Before we can draw a supply and demand diagram, we must first have accurate and real-time data which simply does not exist. [16] Let's zoom in on the fundamentals of supply, demand and inventories. [2]

Although associated gas is an important component of U.S. natural gas supply, the impact of this link has been relatively muted by strong supply from other shale plays specifically Marcellus/Utica, which has contributed to downward pressure and weak gas prices. [1] “The potential double supply shortfall represented by Iran and Venezuela could present a major challenge for producers to fend off sharp price rises and fill the gap,” the IEA said. [36]

Meanwhile shale drillers in the United States are already responding to the surging price: last week ten new oil rigs were deployed in America, bringing the country?s total to its highest level in over three years. [39] Before the upswing in domestic oil production, gasoline prices rose by 22 cents per gallon on average during the summer driving season. [2] Just four years ago, many people thought it was impossible for oil prices to fall back below $100 per barrel, unless there was an economic recession. [2]

Oil market fundamentals have been supportive and spurred record increases in U.S. production - to 10.3 million barrels per day (mbd) in February and another 4.1 mbd of natural gas liquids. [2] Platts reported that OPEC oil production rose by nearly 100,000 barrels per day (bpd) in June to 31.99 million bpd - despite falling production from Libya, Iran and Venezuela - thanks to Saudi Arabia increasing output by 380,000 bpd to an 18-month high. [40]

The “effect of higher prices should in particular become apparent in gasoline demand in the next few months,” it said. [36] The agency trimmed its 2018 world demand growth projection by 40,000 barrels a day to 1.4 million a day, projecting total consumption at 99.2 million barrels a day. [36] Rising demand is also offering up more confidence: OPEC now believes it alone needs an $11 trillion investment to meet non-stop growth in consumption, here. [23]

U.S. gasoline demand hit a record in August, rising to 9.8 million b/d, here. [23]

Crude has climbed 17 percent this year, trading near $78 a barrel in London on Wednesday. [36] According to data from Platts, Libya saw its output fall to 700,000 bpd in June, down from 955,000 bpd in May, and well below the 1.0 million bpd output achieved in February this year, as a militia called the Libyan National Army occupied and blockaded the country's eastern crude export terminals. [40]

Robust forecasting and market analytics on global crude, refined product, natural gas markets, and oilfield services. [6] At $78, a barrel of Brent crude now fetches nearly three times as much as it did at its nadir in 2016. [39] "As Libyan port closures remove about three-quarters of their 1 million barrel-per-day exports, crude is pushing higher again today," he said. [17]

Technical indicators and moving averages are all green on the daily and weekly price chart. [40] I could go on and on discussing estimates of global usage stats, the probability of OPEC meeting quotas, etc. However, I prefer to allow the charts to do the talking. [16] According to the daily chart, this "should" happen somewhere around $75.00 to $76.00 per barrel. [16]

In 2005 hurricanes Katrina and Rita caused a supply disruption that triggered a significant spike in natural gas prices, while the impact on oil prices was not significant. [1] Last month, the IEA said that, even if Saudi plugs the Iran and Venezuela supply gap, the market will be finely balanced in 2019 and vulnerable to oil prices rising higher in the event of further disruptions. [40] With respect to changes in the supply side, the Permian Basin in West Texas and New Mexico is at the center of the relationship between natural gas and oil production via associated gas. [1]

On the supply side, the industry needs to replace 4-5MMb/d production every year due to declining production in mature basins. [6] While it’s “too soon to say what will happen this time,” the agency said, Iran’s fellow OPEC members could fill the gap because their pact to restrain supply leaves them with spare production capacity. [36] Traders anticipate that the cartel's production increases won't be enough to impact short-term supply issues. [16]

Although OPEC and its partners have resolved to curb supply until at the least the end of this year, they’ll meet next month to review their policy. [36]

After several years of propping up oil prices, producer countries must now debate whether to try to put a lid on them. [39] When the U.S. dollar depreciates versus other currencies, the oil price generally falls among all countries where their currency appreciated versus the U.S dollar. [2]

Following global economic expansion, oil prices rose to reach $145/bbl. [1] Afterwards, the ratio started to recover, reaching 27 in 2009, and continued to climb to reach a record 54 in 2012, due to the drastic increase in the oil price and decline in the natural gas price. [1] During this period, the increase in the oil price was largely a result of the unstable political climate caused by the Arab Spring. [1]

“The recent jump in oil prices will take its toll,” said the Paris-based agency, which advises most major economies on energy policy. [36]

U.S. oil demand has been strong this year and remains "buoyantly very high," effectively tying all time records. [23] U.S. oil production appears to be poised for even more growth. [2] Libyan oil production has been nearly erased while U.S. exports strain what's on hand in the world's leading economy. [17]

The biggest unknown for the oil market now is the impact of U.S. sanctions on Iran, which are being reimposed after President Donald Trump abandoned an international nuclear accord with the country, the world’s fifth-largest oil exporter. [36]

If the agency now thinks that Saudi is not entirely up to the task of neutralizing the falling output from Libya as well, this could propel oil prices higher. [40]

U.S. crude production is now up about 10% since the start of the year. [23] Under the deal, which was implemented at the start of 2017 and runs through the end of this year, OPEC and other major oil producers, including Russia, agreed to cut crude production by roughly 1.8 million barrels a day from late 2016 levels in an effort to eliminate a longstanding glut of global supplies. [26] It finds that almost all the variation in the real price of oil since China?s accession to the WTO has been driven by shocks to demand -- and in our judgement, most of these, the global financial crisis aside, can be pinned on China. [10] That is only true if the increase in the price of oil reflects an anticipated increase in demand. [10] Prices rise in the spring as oil futures traders anticipate high demand for summer vacation driving. [41]

In October 1973, the Organisation of Petroleum Exporting Countries (OPEC) put in place an embargo targeted at the U.S. and other major oil-consuming nations which led to the price of oil rising by a factor of three. [10] Our two variables are the growth in global oil consumption, and the real price of oil. [10] For manufacturing industries in general, the average over the past decade was under 8 cents per dollar of sales, so natural gas and oil actually have lagged other industries despite recent price increases. [8] The following chart shows the prices for imported oil from Energy Information Administration. [41] OIL to go down? Potential Head and Shoulders can be spotted at the Daily charts, wherein price is testing the 100MA (purple) at the moment, also price in within the 0.50 fib zone. [25]

After my last posting (link below) oil did rise in price and took profits at "d" level. [25] Changes in the price of oil can be very informative about both current and prospective changes in economic activity. [10] We can use our model to estimate the impact on the real price of oil of possible future changes in economic activity. [10]

The economics of non-associated gas fields are different from the economics of associated gas fields as the development of the latter depend on the dynamics of the oil market. [1] From the demand side, end-users shifted their fuel preference to natural gas in order to cut costs. [1] This occurs despite that fact that demand for gasoline remains high through Labor Day weekend. [16]

With a Ph.D. in economics from the University of Florida, he came to API from Saudi Aramco Strategy & Market Analysis in Dhahran, where he managed short-term market monitoring and the long-term oil demand outlook. [2]

Market focus is likely to be on the supply side again, with concerns about the state of Libya's output. [40] "One factor behind the drawdown has been U.S. crude exports, which have shot higher to help fill the void left in Europe and Asia by the voluntary and involuntary reductions from OPEC producers," he said in emailed remarks. [17]

As China's production has decreased, its demand for coal imports has increased. 54 The tightening global supply for coal created a brief but significant upturn at the end of 2016 in U.S. coal export prices. [5] In 1989 Olivier Blanchard and Danny Quah proposed a novel technique for identifying shocks to aggregate demand and aggregate supply in the U.S. They used a simple model known as a vector autoregression (or VAR), that contained just two variables -- GDP growth and the unemployment rate -- which depended only on lags of themselves and each other. [10] A large part of the reason the output curbs have had such a sizable impact on global inventories has been growing demand for oil. [26] Currently, there has been an overall rise in the global demand for oil - especially with the strong U.S. economy and the upcoming summer driving season and production in other parts of the world has been impacted by events such as uncertainty with Venezuelan production and Iranian oil exports. [8] Low interest policies allowed for an unprecedented growth in credit that supported both consumers (demand) and suppliers of oil. [21]

We find that, if our judgement that we are heading for a global recession in 2020 turns out to be broadly correct, oil could be approaching $20 a barrel within a year or two. [10] OPEC and members Iran and Venezuela are among the top reasons why U.S. benchmark WTI oil has topped $70 a barrel. [26]

A reduction in the supply of oil is likely to reduce global productive potential, and with it global economic activity. [10] In comparison, North America increased its supplies (crude oil and condensates) from 14,7 Mbo/d to 15,1 Mbo/d during he same period, with a high of 15,8 Mbo/d in February 2015, refer also figure 03. [21] Why it matters less today: The amount of oil shipped by rail has dropped 77% since its high in 2015, according to U.S. Energy Information Administration data, charted by Axios' Lazaro Gamio above. [15] Oil, or rather energy more broadly, can be regarded -- alongside land, labour and capital -- as one of the factors of production. [10]

S&P Global Platts said Venezuela output was at its lowest in the 30-year history of the Platts OPEC survey, "aside from a 2002-03 strike that severely debilitated Venezuela?s state oil company PDVSA." [26] "Venezuelan output is not that significant I do not expect oil to sustain these levels much longer as global tensions ease." [26] They note that there has been progress in cutting the glut of global inventories, with a "major reduction in floating storage, oil in transit, and stocks held in some independent areas." [15]

Higher economic growth has led to higher oil consumption, said Williams. [26] The growth of electric vehicle sales and the improved efficiency of fossil fuel-powered engines means that oil global demand in the light-duty vehicles sector will peak as soon as 2025, they note. [15]

In 1971, regulators allowed U.S. companies to pump as much oil as they wanted. [41] The backstory: A series of fiery oil train crashes over the last few years prompted federal regulators to issue a rule, finalized in May 2015, strengthening requirements for trains hauling flammable material like oil and ethanol. [15] Probably we have to wait another 10 years for Mexico to stop exporting oil. [21]

Above average and below average oil revenue groups are defined by countries above or below the sample average of oil revenues as a share of GDP based on 2014 data. [9] Possible bullish scenario for oil I've been looking at this chart for a lil while now. oil has been running almost nonstop to the upside as this chart shows. [25] Our first chart shows the price of a barrel of Brent crude since the early 1970s, adjusted for inflation. [10] This is not surprising as, according to the Energy Information Administration (EIA) about 57% of the cost of providing gasoline to consumers comes from the price of crude. [8] A: The single greatest factor in the price of gasoline is the price of crude. [8]

Support for WTI Crude came from the demand side on 27 July, when data was released showing solid growth in the U.S. economy in the second quarter of 2018. [27] But: The report makes the important point that cars are hardly the only game in town when it comes to total global crude demand. [15]

By imposing the restriction that only shocks to aggregate supply could have a permanent effect on the level of GDP -- while allowing for the possibility that shocks to aggregate demand might have a temporary effect -- they produced time series for shocks to aggregate demand and supply. [10] They are affected by more than the laws of supply and demand. [41]

The U.S. energy renaissance has led to supply growth that contributed to a decline of global oil prices that began in 2014. [8] The 2014-16 collapse in oil prices was driven by a growing supply glut, but failed to deliver the boost to global growth that many had expected. [9]

Cheap oil and gas made the expansion of interstate highways, interstate trucking, and auto ownership part of the America Dream. [41] A: No. The oil and natural gas industry did not receive any unique credit or subsidy in the tax legislation. [8] Oil exporters still have among the lowest levels of export diversification of any other country group. [9]

Efficiency gains in the sector lowered break-even prices considerably, making U.S. shale oil the de facto marginal cost producer on the international oil market. [9] A large increase in the price of oil might be telling us that traders in the oil market expect a large pickup in global economic activity. [10]

Although gasoline prices have increased recently, they?re still lower than where they were four years ago, largely because of increased domestic oil production. [8] U.S. oil prices have been more than $5 per barrel below international prices; this is a discount that U.S. consumers received because we have strong oil production at home. [8] The initial drop in oil prices from mid-2014 to early 2015 was primarily driven by supply factors, including booming U.S. oil production, receding geopolitical concerns, and shifting OPEC policies. [9] With the Libyan civil war, starting in February 2011, Libyan oil supplies collapsed and a tight supply situation became tighter and an already high oil price rapidly gained another $20/b, which it gave up as OPEC increased its oil supplies as of April 2011. [21]

With a strong economy, U.S. petroleum demand has run at its highest levels since 2007 and was up by more than 750 thousand barrels per day in April, compared with one year ago. [8] They will drive prices up even if they only think there will be a surge in demand, such as during the summer driving season, or a shortage, such as during the Libyan uprising. [41] Once demand has peaked, prices normally drop in the fall and winter. [41]

The International Energy Agency forecasts global oil demand at 99.3 million barrels a day this year, up from 97.8 million barrels a day in 2017. [26] This forecast rate of global demand growth (approximately 1.1 million to 1.5 million barrels per day) should provide a strong underpinning for global energy markets and the resulting price of oil. [4] This entry presents the long-run and recent perspectives on coal, oil and gas - global and national production, consumption, reserves, prices and their consequences. [28] The chart below shows the index of average fossil fuel prices - for coal, oil and natural gas - over the last 30 years. [28] No. Opec has spent the past three years attempting to push up the price of oil following its collapse in 2014 when the price plunged from more than $115 a barrel to below $30 a barrel. [22] We have expected prices to move higher since the beginning of 2016, when oil was about $30 per barrel and we looked for a move to $50. [11] As prices recovered, large oil producers (for example, Russia and Saudi Arabia) and medium ones (for example, Iraq and Norway) began to increase production. [5] The major contributor to the fall in petroleum prices in 2014 and 2015 was oversupply in the global market, as oil producers failed to decrease output despite declining prices. [5] As a consequence of several years of lower investment spending on these projects, the global energy market has increased its dependence on future production growth from shale oil. [4] From January 2, 2017, through June 13, 2018, energy stocks increased only 1.1 percent, while the price of oil and the S&P 500 increased 35.8 percent and 24.2 percent, respectively, as shown in Chart 6. [4] As shown in Chart 7, the U.S. economy is less oil-intensive than in the past due to substitution for oil by other forms of energy, improved fuel efficiency and growth in the less-energy-intensive services sector as a share of the overall economy. [4]

U.S. output has grown about 1.5 million barrels per day (bpd), which has been enough to supply much of the strong growth in demand. [11] Adding more supply without rising demand is a recipe for falling prices. [19] Rising demand leads to higher prices as long as the supply remains steady. [19] In the near term there is plenty of supply for the amount of demand so prices are weak. [20] The market is bidding up near term prices because demand is strong relative to supply. [20] Global demand for avocadoes had been growing steadily, which further exacerbated the supply shortage and caused prices to spike significantly. [5]

While we think the U.S. can increase supply, it can?t go it alone in meeting demand growth. [11] We thus think the U.S. will continue to supply most of the world?s demand growth. [11]

The challenge will be producing enough oil to meet demand growth over the next three to five years. [4] World demand for oil is about 100 million bpd and the total reserve release is forecast at 5 million to 30 million barrels. [11]

Oil and gas prices have been two of the main factors pushing up inflation and reducing real disposable incomes. [22] It's a way to make anywhere from three to nine times your money in oil in the next 60 days no matter which way the price moves, as long as it's drastic. [19] We think the price of oil now has to move to a level that gets the rest of the world?s oil industry working again - above $70 and maybe on the way to $80 - and stay in that range. [11] As shown, the key oil blends have a closely matched spot price (despite very small differences). [28] Unlike oil, where blends tend to converge on a very similar spot price, coal types can vary quite significantly. [28] They are very supportive of the idea that good things are about to happen for the price of oil. [20] Does this say the Market is on the cusp of a significant breakout for the price of oil? Maybe. [20]

That was a result of an increase in supply from Russia, Venezuela and other Opec nations desperate for cash and an important new arrival on the scene - fracking firms in the U.S., which had begun pumping huge quantities of oil and gas. [22] Some industry participants are hopeful that this situation could be mitigated by continued technological innovation in shale production and increases in OPEC production, as well as greater future investment in long-lived projects such as oil sands production in Canada and offshore drilling. [4] Iran is the third largest producer in the Organisation of the Petroleum Exporting Countries (Opec), which makes it a heavy hitter in the production of oil. [22] In 2014, the United States is the world's largest country producer of oil, accounting for just under one-fifth of global production. [28] Fossil fuels include oil (31 percent of global energy use by 2040), natural gas (25 percent) and coal (22 percent). [4] Fossil fuels (coal, oil, gas) have, and continue to, play a dominant role in global energy systems. [28] The visualisation shows the global consumption of fossil fuels - coal, oil and gas - from 1800 onwards. [28] Fossil fuels (coal, oil and gas) are finite-consume them for long enough and global resources will eventually run out. [28]

Given the importance of oil to the U.S. and global economies, the Dallas Fed has assembled an experienced team of energy economists, created key industry surveys and built relationships with industry executives in order to build a deep understanding of the energy industry and global energy markets. [4] Dallas Fed economists estimate that by year-end 2018, the U.S. will consume approximately 20.6 million barrels per day of oil. [4] Growth in Global Demand Demand for oil grew from an average of 90.4 million barrels per day in 2012 to approximately 98.4 million barrels per day in the first quarter of 2018. [4]

Improvements in shale oil drilling and completion techniques have been a critical element of this growth, with much of the new production occurring in Texas as well as North Dakota, New Mexico, Oklahoma and Colorado. [4] The major oil companies will go back there and are likely to get good contracts for five to eight years as Venezuela pushes to increase production. [11] Last year for the week of October 17, 2016 the heating oil processing spread ranged from $15.00 to $16.20 per barrel. [20]

As per July 2017 total OECD petroleum stocks were about 350 Mb over the 5 year average before the 2014 oil price collapse. [21] Annualized growth in OECD petroleum consumption per July 2017 hovered around 1,0 - 1,5%, led by Europe with about 2%, while oil prices (Brent spot) remained at about $50/bo. [21]

Rather than lifting global growth, the oil price plunge was accompanied by a slowdown in 2015 and 2016. [9]

An OPEC survey conducted by S&P Global Platts revealed Friday that OPEC?s crude production in April fell for a third straight month to a one-year low. [26] Although crude inventories in the U.S. fell throughout most of last month, they unexpectedly picked up in the week ending 27 July. [27] West Texas Intermediate crude for June delivery US:CLM8 rose $1.01, or about 1.5%, to settle at $70.73 a barrel on the New York Mercantile Exchange, after tapping a high of $70.84. [26]

Looking at the more recent past, the model identifies positive shocks to demand in all but three of the seventeen years since China?s accession to the WTO. The three exceptions were 2008 (when the global financial crisis hit), 2014 and 2015. [10] As they do every year around Memorial Day, the start of the summer driving season, Americans are traveling more, which could raise demand further. [8]

It appears, from looking at the number of oil rigs in Saudi Arabia, that it takes a high(er) number of rigs to sustain and grow oil production, and the number of oil rigs remained high as OPEC(13), led by Saudi Arabia increased its supplies with about 1 Mbo/d over a 2 year period post the oil price collapse. [21] Developments in number of oil rigs in Iraq during the summer of 2014 is interesting as the significant drop in the number of oil rigs apparently coincided with the growth in OPEC supplies and the following collapse in the oil price. [21] It will require a high oil price, considerable CAPEX and take some time to grow total supplies for OPEC members in Africa and South America to the levels of late previous decade. [21] OPEC had a high in oil supplies of 34,0 Mbo/d in July 2008 as the (monthly) oil price reached its apex and reached a new high with 36,0 Mbo/d in November 2016, more than 8 years later. [21]

Booming U.S. shale oil production played a significant role in the oil price plunge from mid-2014 to early 2016. [9] In the event, the benefits of substantially lower oil prices were muted by the low responsiveness of economic activity in key oil-importing emerging markets, the effects on U.S. activity of a sharp contraction in energy investment and an abrupt slowdown in key oil exporters. [9]

Notes: Based on the decomposition of oil price changes from a structural vector autoregressive (SVAR) model including global industrial production, global oil production, oil and metals prices. [9] Between mid-2014 and early 2016, the global economy faced one of the largest oil price declines in modern history. [9] In real terms, oil prices, which had been broadly stable for more than a decade, rose by a factor of six between the late 1990s and the late 2000s, only to plummet as the global financial crisis hit, rebound as the recovery began, and fall sharply again through 2014 and 2015 as investors rightly became concerned by the pace of China?s slowdown. [10] This partly explains why the oil price plunge failed to provide a subsequent boost to global activity. [9] Just months after being enacted, tax reform should not be expected to have had any substantive impact on world oil prices, which are established in a competitive global market. [8]

Long-term oil price forecasts have been considerably downgraded over the last few years, and numerous factors limit upside risks to the outlook. [9] Oil prices are likely "near the top, especially if the sanctions are not reinstated," he said, adding that "Iran is already talking about wanting to raise production and Russia is indicating the same." [26] All oil contracts are traded in U.S. dollars, so oil prices follow the value of the dollar. [41] It was the oil companies? rapid growth in CAPEX leveraged by cheap debt and expectations of a sustained higher oil price that brought about a situation where supplies started to run ahead of consumption/demand that brought the oil price down. [21] Falling oil prices and the growth of pipeline infrastructure helped to drive the decline. [15] Growth in oil supplies was a result from a lasting, high oil price also facilitated by the world?s major central banks low interest policies and fiscal deficit spending. [21] Growth in oil supplies from sanctioned developments while the oil price was high and expected to remain so, collapsed the oil price. [21] In 2005 Kuwait and UAE totaled about 30 rigs which grew to a recent total of about 90 while delivering noticeable growth in oil supplies post the oil price collapse. [21] Following the oil price collapse in the summer of 2014 the number of oil rigs within OPEC(13) dropped significantly while oil supplies, primarily from the Middle Eastern OPEC members, grew with about 4 Mbo/d from the summer of 2014 to end of 2016. [21] During the run up to the oil price collapse, supplies also grew from other non OPEC (ex North America) from developments sanctioned while the oil price was high and expected to remain so. [21]

At least one analyst said oil prices could jump by as much as $10 a barrel if sanctions are reintroduced. [26] From 1948 to 1970, oil prices ranged between $2.50 and $3.00 a barrel. [41]

It's followed by the high and low oil prices that year and the month they occurred. [41] The second oil crisis followed in 1979, the year of the Iranian revolution, which saw global oil production fall by 4%. [10]

Expectations of markedly lower-than-expected oil prices ahead underscores the urgency of reforms to restore growth and fiscal sustainability. [9] Any meaningful growth in the oil companies CAPEX (sanctioned developments, FIDs ) will require a sustained oil price above $60/bo. [21]

Oil prices are the #1 factor in the cost to make motor fuels. [8] Figure 06 shows that just prior to and with the oil price collapse, OPEC(13) started to grow their oil supplies from 32,5 Mbo/d in June 2014 to 36,0 Mbo/d in November 2016. [21] This while the number of oil rigs was increasing and the oil price remained high. [21] The growth in no of oil rigs (ex Iran and Iraq) in OPEC was from about 170 in 2005 to an average of about 300 in 2014/2015. [21] Looking at figure 07 for OPEC(13) the increase in its supplies as of late 2014/early 2015 followed a period with noticeable growth in oil rigs and likely capacity expansions/modifications of oil process/treatment facilities. [21]

They also note that the trajectory of oil demand is at least as sensitive to changes in efficiency of internal combustion engines as it is to EV penetration growth rates. [15] For instance, modeling EVs at 40% of new light duty vehicle sales in 2040 (which is below the Bloomberg New Energy Finance projection of 54%), they project that oil demand for the vehicles will be 3 million barrels below what it was in 2016, but total global demand for all sectors will be 10 million barrels higher. [15] "Mo st of the more progressive demand scenarios now point to a peak in global oil demand somewhere between 2025 and 2035, and a peak somewhere in this range looks quite possible to us. [15] In a monthly report issued in April, however, the IEA warned that the trade dispute between the U.S. and China could hurt oil demand. [26]

Figure 15: The chart show developments in U.S. total petroleum stocks (stacked area, right hand scale) by products since January 2014 and per October 20th 2017. [21] Figure 13: The areas in the chart show the development in petroleum consumption for the U.S., OECD Europe, and other OECD (which includes Canada, Japan and South Korea). [21]

Check out the chart above: One factor that the S&P report delves into is the proliferation of state-based policies called renewable portfolio standards, which mandate that utilities supply escalating amounts of power over time from wind, solar and other sources. [15] To prevent future shortages, Congress created the Strategic Petroleum Reserve to provide a 90-day supply. [41]

An overall peak is somewhat further off, "driven by more durable growth in demand for heavy goods freight, aviation and petrochemicals." [15] This is supplemented with developments in the oil supplies versus the number of active oil rigs for some selected OPEC countries. [21] Looking at developments in oil supplies and the number of oil rigs, two OPEC members stood out, Kuwait and United Arab Emirates (UAE). [21] OPEC oil supplies started a downward trend in June 2012, because of more above ground factors, this time sanctions against Iran. [21] Figure 04: The stacked areas show oil supplies from other Non OPEC (Rest of World -. [21] Non OPEC, led by North America, started to grow its oil supplies as of October 2012. [21] OPECs oil supplies in July 2017 was at 35,5 Mbo/d as Iran, Libya and Nigeria?s oil supplies totaled 0,9 Mbo/d more than in November 2016. [21]

The chart also illustrates that it required a considerable amount of active oil rigs to grow Iraq?s oil supplies. [21] For OPEC(13) a closer look at developments of number of active oil rigs versus developments in the oil supplies. [21]

From June 14 to February 15 Iraq reduced their number of oil rigs from 96 to 56 which explains much of the sharp decrease in the number of oil rigs in OPEC. [21] Note that the number of oil rigs remained high after the agreed OPEC cuts went into effect as of January 2017. [21]

The individual countries active oil rigs (from (Baker Hughes) are shown as stacked lines and plotted versus the left hand scale. [21]

These include: the potential for further gains in shale oil production, an accelerated uptake of more fuel-efficient technologies, and policies supporting renewable energies. [9] To do this, we need to make an assumption about the level of economic activity that is priced in to the oil market at the moment. [10] Libya has suffered from wars and social strifes since 2011 which also has affected its oil supplies. [21]

The chart is complemented with lines showing smoothed 12 month moving averages (12 MMA) for the presented OECD countries/regions. [21] Presenting chart after chart with no detailed interpretation (whether I agree with it or not) isn't worth my time to decipher. [21]

The chart below shows oil consumption by region over the last 50 years. [28] Oil consumption broken down by country is shown in the chart below - in chart, and map form. [28]

As Chart 1 indicates, since 2014, major oil companies have reduced their capital expenditures relating to long-lived projects. [4] What really got my attention this week is when I pulled up the charts of the major oil producers. [20]

Iran is the third largest producer in Opec, which makes it a heavy hitter in the production of oil. [22] Unlike coal production (for which it produces a negligible amount), the Middle East is the world's largest oil producer, accounting for nearly 35 percent. [28] The Asia Pacific region consumes significantly more oil than it produces (only 8-9 percent production versus 32 percent consumption), meaning it is a net importer. [28]

Unsurprisingly, the Middle East is the richest region in terms of oil reserves, although on a country basis Venezuela has the largest global reserves at more than 300 billion barrels. [28] In 1970, the U.S. consumed 1.1 barrels of oil for every $1,000 of GDP; by 2017, only 0.4 barrels of oil were consumed for every $1,000 of GDP. [4] We think equity valuations now are priced for oil at about $50 per barrel. [11] Natural gas - as we explain later in this entry - produces less carbon dioxide per unit energy than both coal and oil, meaning some countries have adopted natural gas substitution as a pathway to decarbonisation. [28] Typically coal produces the most CO 2 per unit energy, followed by oil (which is about one-third lower than coal), and natural gas (which can produce around half the emissions of coal). [28] This is followed by natural gas at approximately 22 percent, oil at only 4 percent (and the remainder supplied by other energy sources, including nuclear and renewable technologies). [28] Energy executives report that public-market capital providers are much more focused on capital discipline from oil and gas companies. [4]

These crack spreads provide us with a real-time indication of how strong demand is for oil products. [20] The keys, however, are Saudi Arabia, Russia and maybe a few smaller countries on the margin that can supply oil. [11] The 1970s 'oil crisis' resulted in a sudden drop in consumption between 1973-74 following an oil embargo of the Organization of Petroleum Exporting Countries (OPEC) in 1973. [28] The administration also recently said it would release oil from the U.S. strategic petroleum reserve. [11] Therefore, a stronger U.S. dollar makes oil more expensive for buyers not using U.S. dollars. [5]

The single largest oil consumer is the United States, with over 10,000 TWh per year. [28] These investments have included deepwater and ultra-deepwater offshore wells, Arctic drilling and oil sands production. [4] On average, three to five barrels of water come out of the ground for every barrel of oil that is produced. [4] Declining oil inventory: Worldwide oil inventories are below their five-year average and we think they will continue to decline for the next few months. [11]

The picture of global oil reserves is typically more well-known than for coal. [28] While there are a number of shale formations across the U.S., the most prolific is the Permian Basin, a geologic area rich in oil and gas that is 250 miles wide and 300 miles long across West Texas and eastern New Mexico. [4] Although there can be notable differences in emissions factors between different types of a given fuel (for example, differences in coal types), there are some more general trends in the relative emissions between coal, oil and gas. [28] The relative mix of coal, oil and gas in total consumption also varies by country. [28] Dallas Fed industry contacts report that the oil and gas industry in the Permian Basin faces a shortage of workers. [4] While the oil and gas industry has become more efficient, drilling and completing wells is still a labor-intensive endeavor. [4]

Look no further than Venezuela, which has the world's largest oil reserves and produces nearly 2 million barrels of oil a day. [19] In 2016, we announced our ability to monitor floating roof tank oil storage in China, and since that time, we?ve expanded to cover 67 countries. [30] As discussed in recent Dallas Fed publications, Wind Power a Growing Force in Oil Country and Texas Has 'All-of-the-Above' Energy Approach, Texas is the nation's largest producer of wind-generated electricity. [4] While this essay focuses primarily on oil, Dallas Fed economists also focus on understanding renewable energy sources. [4]

Prior to being consumed, oil is refined into "petroleum products" such as motor gasoline, jet fuel, kerosene, diesel, residual fuel and other products. [4] We have provided discussion on predictions of peak oil - and why they are often proven false - in our blog post " How long before we run out of fossil fuels? ". [28]

Overall, the maps for oil and natural gas tell a similar story; the distribution of coal, however, is notably different. [28] In the Permian, oil and natural gas pipeline capacity--used to transport oil and natural gas to refineries and processing plants hundreds of miles from the well site--remains a potential problem in 2018 and 2019. [4] You can ship oil by truck or rail if the pipelines are full, but you can?t do that with natural gas. [11]

That was especially true in the United States' shale oil patches, where oil is abundant but expensive to drill. [19] Industry contacts cite the Permian's advantage over other areas due to its multiple layers of thick shale rock, the quality of the oil and the relatively close proximity to refiners, export terminals and pipelines. [4]

Overall, given our forecast and the potential impediments to substantial growth in shale oil production, we believe global oil markets are likely to be more vulnerable in the medium term to geopolitical shocks and disruptions that would create a potential for price risk to the upside. [4] Over the next few years, we believe that global oil markets will be in a "fragile equilibrium" in which demand growth should likely be met in large part by growth in U.S. shale oil production. ? [4] Our economists believe that, over the next several years, the U.S. will continue to increase its oil production, while consumption growth is expected to flatten due to energy efficiency gains as well as greater use of natural gas and renewable energy sources to meet energy demand. [4]

While supply, demand, and pricing have remained somewhat stable over the past year, our observations show that certain countries are taking advantage of short-term conditions by keeping inventories high, while others are being adversely affected by geopolitical volatility. [30] Our industry contacts are concerned about key production impediments that have the potential to limit the ability of shale to supply incremental global demand growth beyond that time frame. [4] Consumer demand for the many and varied products that industries offer has provided the impetus to unlock new sources of energy supply from the industrial revolution to the shale revolution. [42] If there is a major change in demand from China or a surprise increase in supply from Venezuela or Libya, that would shock the markets. [11] While change is possible, we think the fundamentals of supply and demand mean the market is pricing correctly now, but change certainly is possible. [11]

Future expectations of shrinking global supply propped up prices despite friction over production quotas among OPEC countries. [5] During the third quarter, prices decreased each month, likely because of high inventory levels and steady production from OPEC. 30 Following the cyclical pattern of supply cuts and gluts, prices rose 8.2 percent in October, before falling 3.7 percent in November. [5]

Accessible and economic shale gas supplies in the United States have grown dramatically over the last decade; this large supply security has leading to a significant fall in U.S. gas prices. [28] Global supply for metals tightened in 2016, as falling prices over the past few years slowed investment. [5] A major shortage in the global supply of avocados caused large price increases. [5]

Natural gas import prices were down in the first half of 2016, at a time of global oversupply and low crude petroleum prices. [5] Prices for natural gas imports were spurred by higher crude prices, warmer weather during the summer months, expectations for colder seasonal weather in the upcoming winter, and increased industrial demand as the United States shifted from coal to natural gas. [5] Prices had fallen in the months leading up to 2016 because of both lower demand and higher global soybean production. [5] Expectations of lower yields and a 1-percent decline in sown acreage in the United States drove soybean export prices upward in May, with prices increasing 11.3 percent. 49 Prices continued to rise throughout the summer as global demand improved and poor weather conditions hampered production in South America. 50 Soybean prices cooled off in the third quarter, declining 14.3 percent as global production exceeded previous estimates. [5] Mine closures, environmental constraints, and global policy developments (particularly in Indonesia, the Philippines, and China) forced markets to rebalance. 39 In addition, a credit stimulus in China spurred demand for metals that helped prices rebound. 40 Metals, specifically steelmaking materials, experienced a large price increase toward the end of the year, as future expectations for U.S. infrastructure spending increased global demand. [5]

The chart below shows natural gas prices over the last 30 years across different regional sources, measured in U.S. dollars per terawatt-hour. [28]

Hundreds of derricks were mothballed when the price of Brent crude fell below $50 a barrel. [22] During 2015, crude import prices fell 43.7 percent, marking the fourth straight year of declining prices. [5]

Money Morning Global Energy Strategist Dr. Kent Moors nailed his 2017 oil price prediction of $60 a barrel when WTI crude prices hit $60 at the end of December. [19] John Trantin, "Crude oil prices spur gains for U.S. import and export price indexes, despite the appreciating dollar: 2016 annual summary," Monthly Labor Review, U.S. Bureau of Labor Statistics, December 2017, https://doi.org/10.21916/mlr.2017.31. [5]

Relative to its coal reserves (which are very small), Africa has several countries with relatively high oil reserves: these are predominantly concentrated in Libya, Algeria, Nigeria and Angola. [28] Palm oil will be one of the only commodities to average lower on a y-o-y basis in 2017, at MYR2,350/tonne, compared with MYR2,500/tonne in 2016 and to the 2011-2015 average of MYR2,630/tonne. [43] It?s going to get pretty tight during the next six to 12 months and a lot of producers won?t be able to get their oil to market. [11]

Given the current lack of investment in long-lived production projects, and assuming global oil demand continues to grow between 1.1 million and 1.5 million barrels per day, we would expect future world consumption growth to be more dependent on shale production growth. [4] It is estimated that global oil demand is likely to increase from an average of 98.4 million barrels per day in the first quarter of 2018 to approximately 101.5 million barrels per day by 2020. [4]

With OPEC capping its oil production, we're expecting this increase in demand will help push oil prices higher. [19] OPEC is boosting output, U.S. shale oil production is growing again, emerging markets are demanding more energy - where might oil prices go from here? Watch the highlights as Ivy?s energy investment team?s discusses key issues and opportunities. [11] The emergence of U.S. shale is one factor, as increased domestic production means that a larger share of the economy is helped by higher oil prices. [4] The U.S. fracking industry was supposed to ride to the rescue and prevent oil prices from ever soaring again by switching on dormant production rigs. [22]

The U.S. import and export price indexes rose in 2016 because the dynamics of the world oil market ran counter to traditional expectations. [5]

The price spikes of 1974, 1979, 1990 and 1999 all served to usher in recessions, and a near-doubling in crude in 2008 may not have helped matters then either, while even the rapid rise in summer 1987 will conjure up memories of stock market chaos." [22] Financial adviser AJ Bell said in a note to investors that a sustained surge in crude could lead to inflation or even a slowdown in global economic activity because higher energy and transport costs would hit consumer spending and corporate profit margins. [22] Energy efficiency improvements will help curb the growth in global energy demand to about 25 percent over the period to 2040, while global economic output nearly doubles. [42] The recent cold snap, which affected not only the UK but much of the continent and the U.S., also sent energy prices upwards as demand spiralled. [22]

Uncertainty about supply and demand is adding volatility and remains a key issue for the market now. [11] Early in recovery stage: We?re focusing on market fundamentals now, not on "What if?" scenarios for supply and demand. [11]

Prices for iron and steel mill products rose 10.7 percent over the year, as material inputs and tighter supply led to higher prices. [5] House prices in Midland have risen substantially since 2016, and housing inventories are estimated at one month of supply. [4]

Several countries - the largest example being the United States - have therefore achieved carbon dioxide reductions in recent years by substituting coal production in its energy supply with natural gas. [28] Fossil fuels are consumed for energy supply in a number of ways, including transport, heat and electricity production. [28]

In a global market that is in relative oil supply/demand balance, supply outages due to geopolitical events have the potential to cause sporadic episodes of spikes in oil prices. [4] MDE palm oil prices will remain supported on a two-to-four month horizon as current global supply is tight. [43] These disruptions (or "supply shocks") have the potential to cause a rise in oil prices in the short term. [4] Palm oil prices will ease significantly in 2017, as the temporary tightness in supply brought by El Nino in 2016 will dissipate. [43]

It is our view that a 10 percent increase in the oil price should have a relatively modest negative impact on U.S. GDP growth. [4] It warned there could be a substantial impact if prices keep rising: "History suggests that it is only when oil prices have doubled year-on-year that global growth really starts to feel the pinch. [22]

Overall, total world oil production averaged 80,557 thousand barrels a day in 2016, compared with 80,448 thousand barrels a day in 2015. 27 By the end of the third quarter of 2016, global production had started to rise but domestic production levels had fallen to its lowest point since March 2014. [5] First quarter 2018 estimates indicate that global average oil production was approximately 98.3 million barrels per day and global consumption was approximately 98.4 million barrels per day. [4] Removing nearly 2 million barrels a day of production would boost oil prices. [19] For instance, even as oil prices closed out 2017 at their highest prices of the year and have even gained more since 2018 started American oil exports are also hitting their all-time highs of 2 million barrels of oil a day. [19] Dallas Fed analysis indicates that every dollar increase in the oil price leads to a 2.4 cent increase in gasoline prices--all other factors staying the same--which over the course of a year would amount to approximately $3.4 billion in additional expenditures on gasoline. [4]

In many lower-income countries, total consumption of fossil fuels continues to increase as a result of both population growth and rising incomes (resulting in higher per capita energy demands). [28] We think it?s reasonable to assume there will be a reversion to the mean in demand, in part given higher prices. [11] Due to the potential impediments described above, there is a growing likelihood of an eventual global undersupply situation in which shale will be unable to keep up with demand growth. [4] As global prosperity continues to expand, industrial energy demand will increase. [42] Global energy demand will continue to rise through 2040, reflecting its fundamental link to growing prosperity and better living standards for an increasing population worldwide. [42] Demand for electricity continues to rise as it is the energy used in powering wide applications ranging from lighting to home appliances to global e-commerce and digital services. [42]

Energy demand as used in this Outlook refers to commercial and non-commercial energy (e.g., traditional biomass) consumed as a fuel or used as a feedstock for the production of chemicals, asphalt, lubricants, waxes and other specialty products. [42] The growth in transportation energy demand is expected to account for about 60 percent of the growth in liquids fuel demand. [42] To put this in perspective, if world energy demand grew as fast as estimated GDP, energy demand growth could be about four times the projected amount. [42] Emerging markets in non-OECD nations will account for essentially all energy demand growth, led by the expanding economies in the Asia Pacific region. [42] Industrial energy demand growth would be much higher if not for the persistent pursuit of energy efficiency improvements. [42]

These can be brought back into production quickly to offset Opec production cuts and meet rising demand. [22] The oil production sector has added more than 40,000 jobs in Texas and more than 60,000 jobs in the U.S. from December 2016 through April 2018, and high demand for workers has led to significant wage pressures. [4] Morgan Stanley was one of the few banks to argue that U.S. shale drillers would not be able to keep up with rising demand. [22] Both a brief period of depreciation of the U.S. dollar during the first half of 2016 and the uncertaintly that followed the U.K. Brexit decision contributed to increased demand for precious metals. [5]

Throughout 2016, global demand for soybeans ticked up, contributing to higher prices. [5]

The charts in the sections to follow provide more detail on the absolute price as well as changes in prices of each fossil fuel across regional sources. [28] The series of charts below present levels of natural gas production and consumption (which do not necessarily correlate) across the world, by region and country. [28] The chart below shows natural gas production by region from 1970 onwards. [28] As the chart below shows, the disparity of floating roof tank storage between OPEC and global producers remains quite large. [30] The chart and map shows the change in coal production at the country level over the longer-term. [28]

U.S. commercial crude stocks have decreased by 23 million barrels since the start of the 2017. [20] Dallas Fed economists focus on energy market dynamics because of their implications for oil prices, which in turn, affect U.S. gross domestic product (GDP), employment and inflation. [4] Some U.S. energy companies are showing restraint in capital expenditures because they?re generating excess cash flow at current oil prices. [11] U.S. shale oil companies can produce at the current oil price, but many in the rest of the world cannot. [11] Over time, several factors have mitigated the impact of higher oil prices on the U.S. economy. [4] Historically, recessions in the U.S. have often followed oil price shocks. [4]

It?s worth noting that the international oil price is above $70 per barrel but pricing in the Permian Basin is closer to $55. [11]

It?s hard for investors and the oil market to believe in the price now because of the volatility. [11] Reduction in Spending on Long-Lived Projects One potential issue facing the global oil market is the recent decline in capital investment in long-lived exploration and production (E&P) projects. [4] When Iran pledged to limit its nuclear ambitions to civil energy production under the deal with the P5+1 group of world powers - the U.S., UK, France, China, Russia and Germany - sanctions were lifted on its oil exports, giving a significant boost to global oil supplies. [22]

Global oil production has increased more than 2.5-fold over the last 50 years, despite more volatile growth relative to coal. [28] American shale oil production will rise alongside oil prices. [19] Firms like PAA keep their expenses low and generate more revenue as oil prices and oil production rise, which means more of their profits get passed on to shareholders. [19] Government subsidies, coupled with the rise in international oil prices in 2017 will make palm oil-based biodiesel use more attractive next year. [43] Oil prices have nearly doubled over the last two years, and they have room to run even higher in 2018. [19] Oil price increases also tend to cause firms to experience higher energy, shipping and input costs. [4] Higher oil prices tend to increase costs to consumers, which can, in turn, reduce their disposable income and consumption of non-oil goods and services. [4] Oil demand - or alternatively, consumption - is one of the key determinants of oil prices. [28] The International Energy Agency (IEA) is forecasting oil demand will rise by 1.4 million barrels a day in 2018. [19]

Combined residential and commercial energy demand is projected to rise by more than 20 percent through 2040. [42] About 90 percent of this demand growth will be met by electricity. [42] Liquids demand for light-duty vehicles is expected to be relatively flat to 2040, reflecting better fleet fuel economy and significant growth in electric cars. [42] That growth coupled with demand returning to average could add balance to the market. [11]

OPEC has begun to increase output again but at a conservative pace, in part just to keep up with demand. [11] Continuing urbanization and a significant expansion of the middle class, particularly in China and India, will help drive this trend, highlighted by greater access to modern energy in homes, rising industrial demand, and significant increases in personal and commercial transportation needs. [42]

As it stands, every increase in demand and attempts at reduction in supply outside the U.S. is being more than compensated for by increases in domestic production, and eventually the price must reflect that, despite a continued positive outlook for economic growth. [32] There?s also the potential that the new U.S. pipelines due in late 2019 could prompt producers to begin a major re-acceleration in supply growth. [11] Over the last 10 years, about 70% of the growth in supply has come from two countries: Iraq and the U.S., although Saudi Arabia and Russia both added a little to their totals. [11]

The agency recently said 90% of the supply governed by the Opec cuts was holding to lower production limits. [22] Dallas Fed economists and our industry contacts increasingly are of the view that we have gone from a global oversupply situation (2014 to mid-2017) to one currently of relative balance (taking into account OPEC supply restrictions). [4]

It was not increasing supply, with close compliance to the agreed output reduction, and even was producing less because Venezuela?s production had dropped off steeply. [11] That surge in production meant excess supply was added to the market. [19]

Can the U.S. continue to increase supply? We don?t think Iraq can. [11] The only game in town has been the U.S. as far as growing supply. [11]

In the U.S., the pipeline bottlenecks are affecting supply growth. [11] We don?t think the recent dramatic growth rate is sustainable, given current conditions, but that still is likely to mean a supply shortfall. [11]

Based on these various factors, it is the view of Dallas Fed economists that the negative impact of higher oil prices on GDP growth is likely to be more muted than in the past. [4] WTI oil prices reaching $60 a barrel didn't come as a surprise to us. [19] Now Moors has issued his 2018 oil price target of $67 a barrel by the end of Q2. [19]

One of the reasons oil prices have been so volatile over the last three years was due to the fundamentals of the market falling out of alignment. [19] Volatility is the nature of oil prices and is likely to continue in the next year. [11]

Gas prices, which tend to track the oil price, have also increased steeply. [22] This is a bullish catalyst for oil prices, because OPEC has been adhering closely to its agreement. [19] The last four times the oil futures market slipped into backwardation oil prices rallied between 25 percent and 72 percent over the next nine months. [20] Import prices for petroleum and petroleum products, specifically fuel oil prices, led the over-the-year gains. [5]

U.S. companies slowed production, and many oil rigs were shut down altogether. [5] As oil prices fell, American oil production dropped 6% between 2015 and 2016. [19] As the visualisation below shows - global oil production is much more equally distributed across the world's regions. [28] The series of charts below present levels of oil production and consumption (which do not necessarily correlate) across the world, by region and country. [28] The chart below shows the regional trends in coal consumption over the last fifty years. [28] Best estimates of the number of years of fossil fuels remaining based on current known reserves is shown in the chart below. [28] To compare these differences, we use a metric called a 'carbon dioxide emissions factor' - which is shown for various fossil fuel sources in the chart below. [28]

The March 2018 Dallas Fed Energy Survey indicated that the Midland Basin portion of the Permian appears to be more economically attractive than other shale formations, on average, as shown in Chart 4. [4] This change in share over time is shown in the chart below. [28] This budget - to achieve a 50 percent probability of meeting our target is shown in the chart below. [28] The chart below shows UK coal employment in absolute numbers - this includes the number of workers contracted by the coal industry for work. [28]

Data for different countries and regions can be viewed using the "change country" function of the chart. [28] It's the best place for investors to get their toe-hold in the oil market nowwhen people don't believe what the charts are telling them. [20]

Trump?s threat to reimpose sanctions and effectively keep up to half of Iranian oil in the ground has hit the oil price since he was elected in November 2016. [22] Oil prices have been in a sustained trend higher since the beginning of 2016. [11]

Industry contacts acknowledge that higher oil prices could well induce producers to find ways to overcome these potential impediments. [4] You can take a long position on oil prices and profit as they rise. [19] If oil prices rise above the futures contract price, then you can sell them for a profit. [19] Even though they might be some of the largest companies in the world and household names oil companies like Exxon Mobil Corp. (NYSE: XOM ), Royal Dutch Shell Plc. (NYSE ADR: RDS-A ), and Chevron Corp. (NYSE: CVX ) are too bogged down with debt and billion-dollar projects across the world to grow much when oil prices rise. [19] By using this strategy, oil prices don't have to rise for you to profit. [19]

Bureau of Labor Statistics data indicate that layoffs during the oil price decline of 2014-15 resulted in an estimated loss of one-third of the workforce, and industry contacts report that many workers either are reluctant to return to the industry or need significant financial and/or job security incentives to return given the boom/bust nature of the industry. [4] The appreciation of the dollar likely contributed to a further decline in world oil prices in the first 2 months of 2016. [5]

OPEC's most recent agreement started on Nov. 30, 2016, and capped the oil production of the cartel and 11 other participating countries, including Russia, at 32.5 million barrels a day. [19] If the United States sanctioned Iran's 3.8 million barrels a day of oil production, the country would likely have to scale back. [19]

U.S. oil production skyrocketed 72% between 2010 and 2015, when annual production hit a four-decade high. [19] This negative impact should further diminish as the U.S. continues to grow its domestic oil production. [4]

Prospects for palm oil production in 2015/16 have worsened in recent months and we now forecast output to decrease by a greater amount than a few months ago. [43] The visualisation below shows the change in oil production at the country-level from 1900 onwards, where data is available. [28] As explored later in this entry, oil production in the United States looked likely to peak and decline in the 1980s before rising again with the extraction of increasing numbers of shale oil resources. [28] After decreasing for the first time since 1997/98 in the ongoing 2015/16 season, palm oil production will rebound in 2016/17 with the return to normal weather. [43] Types of oil production have influenced the shapes of these trends over time. [28]

Global oil markets face a number of uncertainties and challenges. [4] As discussed in this essay, Dallas Fed economists believe that the global oil market is now in relative supply/demand balance. [4]

Now that we know OPEC will continue to keep its oil cut agreement all the way through 2018, we expect the oil market to continue balancing. [19]

The chemicals industry is the industrial sub-sector with the highest rate of growth, as demand for plastics and other petrochemical products outpaces GDP in many regions. [42] The transport industry is also being hit by rising costs, which it is struggling to pass on to retailers in a time of squeezed real incomes and weak consumer demand. [22]

Energy demand for power generation accounts for about 50 percent of global demand growth. [42] It produces 2.5m barrels a day, equal to about 3% of global demand. [22] Global demand will pick up in 2016 and 2017 after a slow 2015, growing by 4.6% both years. [43] In the medium term, Dallas Fed economists continue to believe that, due to expected growth in daily global demand, the trend of global supply/demand is fundamentally toward balance. [4] World Bank and International Monetary Fund projections suggest that global demand growth will continue to be driven primarily by emerging-market economies. [4]

Initially, spot prices rose more than longer- dated prices, indicating that the market believed that the rise in longer-dated prices gave enough incentive to the global majors to bring on new supply over the medium term, while higher spot prices were needed to ensure that demand would not grow too fast in the meantime. [31] OPEC had relied on price inelasticity 85 to maintain high consumption, but had underestimated the extent to which conservation and other sources of supply would eventually reduce demand. [34] We also argued that if OPEC stops balancing the market, this could lead to more spot price volatility, the reason being that in a world where OPEC no longer holds any spare capacity, supply shortages would lead to sharp inventory drawdowns and the market would have to be balanced primarily via demand destruction over the short run. [31] Russia already rumbled some dissatisfaction at the last meeting of the parties to the cuts, and if crude prices simply stall for a while and U.S. exports continue to increase it is unlikely that the Russians will continue with a policy whose net effect is to enrich U.S. oil companies. [32] The huge, 14-times rise in the price of oil from 1998 to 2008 prompted U.S. oil producers to step up exploration, which ultimately led to new production. [33] With non-OPEC conventional production declining and OPEC being cautious with investments, the burden to secure supply growth over the next five if not ten years lies almost entirely on U.S. shale oil producers. [31] A longer-dated price of USD55/bbl signals that the market believes that shale oil producers will deliver all future production growth. [31] The IMF estimate that in 2016 11, the five major Middle-Eastern oil producers had an average fiscal break-even price of around $60 p/b, compared with estimates of an average (physical) cost of production of around $10. [24] Fiscal break-even prices do provide a rough sense of the order of magnitude of the social costs of production, and suggest that for many of the world?s major oil producers the social cost of production is much greater than the physical cost. [24]

By the end of the embargo in March 1974, 2 the price of oil had risen from US$3 per barrel to nearly $12 globally; U.S. prices were significantly higher. [34] The improvements stayed even though the price of a barrel of oil remained constant at $12 from 1974 to 1979. 54 Sales of large sedans for most makes (except Chrysler products) recovered within two model years of the 1973 crisis. [34] In that note we described the difficult choice OPEC had to make: Should it continue to let the market play out as it did for the past couple of years, hoping that low prices will push out or at least curtail the shale oil producers over the long run; or, should it return to its former strategy and try to balance the market. [31] From 1947 to 1967, the dollar price of oil had risen by less than two percent per year. [34] Ultimately the ability of oil producing economies to adopt a more competitive "higher volume, lower price" strategy depends on their total cost of production, including social costs. [24]

Supply and demand factors do play a role in price formation, but they are far from being the only factors. [33]

RANKED SELECTED SOURCES(43 source documents arranged by frequency of occurrence in the above report)

1. (82) A Perspective on Oil - Dallasfed.org

2. (61) Crude oil prices spur gains for U.S. import and export price indexes, despite the appreciating dollar: 2016 annual summary : Monthly Labor Review: U.S. Bureau of Labor Statistics

3. (53) Fossil Fuels - Our World in Data

4. (49) World Crude Oil Supplies per July 2017 | Peak Oil News and Message Boards

5. (44) Crude oil price forecast 2020

6. (41) Oil market still focused on supply/demand | Ivy Investments

7. (36) Are Crude Oil & Natural Gas Prices Linked? - CME Group

8. (31) New Oil Prices Forecast And Charts For 2017

9. (25) How Tight Is Global Crude Oil Supply? | Seeking Alpha

10. (23) News in Charts: Why oil might approach $20 a barrel | Lipper Alpha Insight | Thomson Reuters

11. (23) API | Fuel Costs and the Driving Season

12. (21) Why are oil prices soaring as US exits Iran nuclear deal? | Business | The Guardian

13. (20) Gas Prices Explained

14. (18) Crude Oil - The Next 5 Years

15. (16) Nobody in Oil Believes What They're Seeing Right in Front of Them

16. (16) Energy demand | ExxonMobil

17. (15) Oil Prices: A Chart Says a Thousand Words

18. (15) Surge in global oil supply may overtake demand in 2018: IEA | Reuters

19. (15) What triggered the oil price plunge of 2014-2016 and why it failed to deliver an economic impetus in eight charts | Let's Talk Development

20. (14) oil above $60 won't continue as supply, demand will drag prices back to earth

21. (14) Exxon?s Shocking Supply And Demand Predictions | OilPrice.com

22. (13) Generate - October 12, 2017 - Axios

23. (13) 3 Oil Charts To Close 2017

24. (13) Oil prices have surged above $70--here are 4 key reasons behind the rally - MarketWatch

25. (12) IEA Cuts 2018 Oil Demand Forecast as $70 Crude Takes a Toll - Bloomberg

26. (11) Oil prices chart new territory on supply-side concerns - UPI.com

27. (11) Crude Oil Price History: Chart Since 1974

28. (10) Crude Oil Price Forecast: Market Seeks Direction | Investopedia

29. (9) Peak oil demand and long-run oil prices | Spencer Dale - group chief economist | Energy economics | BP

30. (9) USOIL Charts and Quotes -- TradingView

31. (7) Understanding Global Oil Storage Trends Through Geospatial Analytics - Orbital Insight

32. (7) The price of oil inches towards $80 a barrel - Daily chart

33. (7) Palm oil: Tight Market For Now, Prices to Ease in 2017

34. (6) Global Demand for Crude Oil on the Rise

35. (6) WTI Crude Oil Price | Historical Charts, Forecasts & News

36. (5) 1973 oil crisis - Wikipedia

37. (5) Global Oil Supply & Demand Outlook | McKinsey Energy Insights

38. (4) Short-Term Energy Outlook - U.S. Energy Information Administration (EIA)

39. (4) Oil Prices Vs. Production: See the "Elephant" Almost Everyone Ignores :: Elliott Wave International

40. (3) Egypt Crude Oil Production | 1994-2018 | Data | Chart | Calendar | Forecast

41. (3) Oil price collapse is coming - Business Insider

42. (2) • Daily global crude oil demand 2006-2018 | Statistic

43. (1) US Crude Oil Field Production

s2Member®
Skip to toolbar