Global Oil Markets -April 4

[dan_s]

I will be speaking to Dr. Joe Dancy's class at Oklahoma University tomorrow (April 5). Here are a few bullet points that I will be sharing with the "kids". It is a graduate level class, so some very sharp industry folks will be there. I best be on my toes.

Myths that frighten investors:
> EVs and renewables will slow oil consumption in the near future
> U.S. shale production can meet all future demand for oil
Confusion is cause by the belief that all shale is the same and all oil is the same
> We no longer need conventional exploration
> OPEC and Russia can flood the market with oil whenever they feel like it
> Fundamentals don't matter anymore because the "speculators" set the oil price and investors don't understand how the oil markets work

Here are the Oil Market Facts:
> Demand for refined products made from oil is HIGH and will continue to go up until at least 2030
> Demand for oil exceeds supply today
> U.S. refiners MUST ramp up production and they will use a lot more crude oil in Q2 and Q3
> U.S. shale CANNOT KEEP UP WITH GLOBAL OIL DEMAND + the ultra light oil from the shale plays is not a good match for our refineries
> $50 oil is UNSUSTAINABLE because very few projects in the WORLD are economic at that price
> We need offshore projects to be developed and they need AT LEAST $70 oil.