You all need to read this article that explains why Morgan Stanley increased their oil price forecast to $95/bbl and why oil prices are unlikely to return to $70/bbl anytime soon.
One Bank Crunches The Numbers On Oil Supply/Demand Dynamics, Reaches A Shocking Conclusion
BY TYLER DURDEN
WEDNESDAY, OCT 20, 2021
https://www.zerohedge.com/markets/one-b ... conclusion
Oil Price Forecast - Oct 21
Oil Price Forecast - Oct 21
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price Forecast - Oct 21
There is a huge range of uncertainty about oil demand, and that is reflected in the wide range of estimates
> The OPEC secretariat estimated 2030 demand at 106.6 mb/d in its recent World Oil Outlook, released in September.
>Earlier in October, the EIA – part of the US Department of Energy – released a set of scenarios with 2030 oil demand estimates ranging from 103.4 mb/d to 115.4 mb/d, with a base-case estimate of 109.2 mb/d.
> Last month, S&P Global Platts showed an estimated for 2030 demand of 113 mb/d in its reference case,and still 102.3 mb/d in its most recent 'Two Degree' scenario released in August.
> The IEA showed forecasts in its recent World Energy Outlook (WEO) ranging from 103 mb/d under its 'Stated Policies' scenario, down to 72 mb/d under the 'Net Zero Emissions' scenario. However, these are somewhat in contrast with other figures from the IEA, specifically its medium-term oil market forecasts. In 'Oil in 2021', released in March 2021, the IEA estimated demand to reach 104 mb/d already by 2026. < As I have posted here many times, EVERYONE at IEA knows that they must agree with the Paris Climate Accord if they wish to keep their high paying jobs. "What Gets Rewarded, Gets Done".
Clearly, there is potential for large divergence between what will happen and what should happen.
For the purposes of oil market forecasting, Morgan Stanley's working assumption is that oil demand will continue to grow in coming years and still reach a level of ~105 mb/d around the turn of the decade, (based on the two models which it discusses in the full report.) The question then becomes: can the industry supply this? On current trends, the answer is probably 'no'.
> The OPEC secretariat estimated 2030 demand at 106.6 mb/d in its recent World Oil Outlook, released in September.
>Earlier in October, the EIA – part of the US Department of Energy – released a set of scenarios with 2030 oil demand estimates ranging from 103.4 mb/d to 115.4 mb/d, with a base-case estimate of 109.2 mb/d.
> Last month, S&P Global Platts showed an estimated for 2030 demand of 113 mb/d in its reference case,and still 102.3 mb/d in its most recent 'Two Degree' scenario released in August.
> The IEA showed forecasts in its recent World Energy Outlook (WEO) ranging from 103 mb/d under its 'Stated Policies' scenario, down to 72 mb/d under the 'Net Zero Emissions' scenario. However, these are somewhat in contrast with other figures from the IEA, specifically its medium-term oil market forecasts. In 'Oil in 2021', released in March 2021, the IEA estimated demand to reach 104 mb/d already by 2026. < As I have posted here many times, EVERYONE at IEA knows that they must agree with the Paris Climate Accord if they wish to keep their high paying jobs. "What Gets Rewarded, Gets Done".
Clearly, there is potential for large divergence between what will happen and what should happen.
For the purposes of oil market forecasting, Morgan Stanley's working assumption is that oil demand will continue to grow in coming years and still reach a level of ~105 mb/d around the turn of the decade, (based on the two models which it discusses in the full report.) The question then becomes: can the industry supply this? On current trends, the answer is probably 'no'.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group