The U.S. Energy Information Administration’s (EIA) global oil demand forecasts have grown increasingly bullish over the past year, in part a reflection of the agency’s growing confidence that demand from non-OECD countries, most notably China, will continue to rise. EIA said in its latest monthly outlook that growth would average 1.6 million barrels per day (mbd) in 2017, some 400,000 b/d higher than the forecast a year ago, and a full 200,000 b/d higher than the International Energy Agency’s 2017 global oil demand projection. A historically bullish forecaster, EIA increased its baseline estimates for 2013-16 by about 900,000 b/d to account for higher demand in some non-OECD countries. Its latest outlook for 2017 pegs world liquids consumption at 98.1 mbd, 1.7 percent higher than its current 2016 global demand estimate. Despite OPEC’s recent production cut and rising demand, high commercial inventories and increased shale output may prolong market rebalancing.
Read: http://www.oilandgas360.com/eia-global- ... pared-iea/
Global Oil Market
Global Oil Market
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Global Oil Market
In the last IEA Oil Market Report they reported that OECD inventories declined by more than 70 million barrels in Q4, 2016. < Important to note that this is before the OPEC production cuts.
Since December, 2013 total OECD oil inventories are 550 million barrels higher than "normal".
Since the world now consumes more than 4 million barrels of oil per day than it did in 2013 (and increasing another 1.5 million BOPD in 2017), I think we can agree that "normal" inventory levels need to be much higher. So, my SWAG is that OECD inventories need to drop by 300 to 350 million to return to the "new normal".
That should happen sometime during the 2nd half of this year, assuming Non-OPEC production is flat YOY (U.S. production is rising but all other Non-OPEC production is declining). Plus, Russia (a Non-OPEC country has agreed to cut production equal to expected U.S. growth).
Oil Price Forecasts:
Bullish: https://tudor.na.bdvision.ipreo.com/NSi ... 7478817503
Bearish: http://oilprice.com/Energy/Oil-Prices/W ... 0-Oil.html
A Wild Card: What about an "Unplanned Event"
> Trump rips up the Iranian Nuke Deal
> Violence in an OPEC country (happens about every day)
> Weather related supply disruptions
My forecast/valuation models assume oil prices drift higher, rising to WTI at $60 in 2H 2017. You need to decide what oil, gas and NGL prices are going to be and base your investment strategy on that assumption.
Since December, 2013 total OECD oil inventories are 550 million barrels higher than "normal".
Since the world now consumes more than 4 million barrels of oil per day than it did in 2013 (and increasing another 1.5 million BOPD in 2017), I think we can agree that "normal" inventory levels need to be much higher. So, my SWAG is that OECD inventories need to drop by 300 to 350 million to return to the "new normal".
That should happen sometime during the 2nd half of this year, assuming Non-OPEC production is flat YOY (U.S. production is rising but all other Non-OPEC production is declining). Plus, Russia (a Non-OPEC country has agreed to cut production equal to expected U.S. growth).
Oil Price Forecasts:
Bullish: https://tudor.na.bdvision.ipreo.com/NSi ... 7478817503
Bearish: http://oilprice.com/Energy/Oil-Prices/W ... 0-Oil.html
A Wild Card: What about an "Unplanned Event"
> Trump rips up the Iranian Nuke Deal
> Violence in an OPEC country (happens about every day)
> Weather related supply disruptions
My forecast/valuation models assume oil prices drift higher, rising to WTI at $60 in 2H 2017. You need to decide what oil, gas and NGL prices are going to be and base your investment strategy on that assumption.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Global Oil Market
A Reuters poll of 31 analysts and economists forecast benchmark U.S. oil prices will average $56.08 per barrel in 2017, up from $43.47 last year.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Global Oil Market
Saudi Arabia's crude oil shipments fell in December to 8.014 million barrels per day (bpd) from 8.258 million bpd in November, official data showed on Monday.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Global Oil Market
Goldman Sachs research note:
"Assuming the U.S. oil rig count stays at the current level, we estimate U.S. oil production would increase by 405,000 (barrels per day) between fourth-quarter 2017 and fourth-quarter 2016 across the Permian, Eagle Ford, Bakken and Niobrara shale plays."
"Annual average U.S. production would increase by 130,000 bpd year over year on average in 2017."
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People tend to forget that outside of the Permian Basin and Tier One areas of the other shale plays, production is on decline. Outside of the U.S. all other Non-OPEC production (combined) is on decline. See slide 6 of my last Oil & Gas Market Update and look at 2017 production declines in China, Mexico, Azerbaijan and UK. If Russia complies with their agreement, their 2017 production will also be down.
"Assuming the U.S. oil rig count stays at the current level, we estimate U.S. oil production would increase by 405,000 (barrels per day) between fourth-quarter 2017 and fourth-quarter 2016 across the Permian, Eagle Ford, Bakken and Niobrara shale plays."
"Annual average U.S. production would increase by 130,000 bpd year over year on average in 2017."
--------------------------------------------------
People tend to forget that outside of the Permian Basin and Tier One areas of the other shale plays, production is on decline. Outside of the U.S. all other Non-OPEC production (combined) is on decline. See slide 6 of my last Oil & Gas Market Update and look at 2017 production declines in China, Mexico, Azerbaijan and UK. If Russia complies with their agreement, their 2017 production will also be down.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
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bearcatbob
Re: Global Oil Market
So – Goldman versus Dan – who is smarter? Only the market can answer that question. So far ________________?
Re: Global Oil Market
Not sure what your comment means, but I've been saying for months that U.S. production will increase by around 500,000 BOPD which is close to what EIA is now saying.
U.S. oil production:
December, 2015 actual was ~9.2 million barrels per day
December, 2016 actual was ~8.8 million barrels per day, up from low of ~8.4 million barrels per day in July, 2016 because a lot of DUCs completed in Q4
December, 2017 forecast is ~9.3 million barrels per day
U.S. oil production:
December, 2015 actual was ~9.2 million barrels per day
December, 2016 actual was ~8.8 million barrels per day, up from low of ~8.4 million barrels per day in July, 2016 because a lot of DUCs completed in Q4
December, 2017 forecast is ~9.3 million barrels per day
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group