IEA Oil Market Report dated June 11, 2015
Posted: Thu Jun 11, 2015 12:00 pm
Penn Energy: "The expected decrease in shale oil production this summer is causing oil prices to rise. According to the Drilling Productivity report released June 8 by the Energy Information Administration, the government is calling for a 91,000 less barrels per day of shale oil in July. Oil prices seemingly rebounded after the data was released. This news comes on the heels of a decline in oil prices on June 8 due to the Chinese oil crisis concerning oversupply and less demand. Production efficiency is helping shale oil flow remain steady although there are fewer rigs drilling for oil than in the past. The expected decrease in production, including fewer new drilling explorations and spending cuts, has resulted in the commodity's prices rising more than 30 percent since experiencing lows in March."
Read the IEA "Oil Market Report" highlights at the link below.
https://www.iea.org/oilmarketreport/omrpublic/
Note that they have raised their demand forecast again. Back in the 2008-2009 cycle, demand forecasts started at 1.0 million bbls per day and the actual demand increase (as a result of much lower fuel prices) was over 3.0 million bbls per day. I believe IEA is once again grossly under-estimating the demand increase caused by lower fuel prices.
I also believe we are just now seeing the beginning of the U.S. declining oil production as a result of the drastic decline in active drilling rigs. I believe the rate of decline will accelerate as we move through the summer.
Read the IEA "Oil Market Report" highlights at the link below.
https://www.iea.org/oilmarketreport/omrpublic/
Note that they have raised their demand forecast again. Back in the 2008-2009 cycle, demand forecasts started at 1.0 million bbls per day and the actual demand increase (as a result of much lower fuel prices) was over 3.0 million bbls per day. I believe IEA is once again grossly under-estimating the demand increase caused by lower fuel prices.
I also believe we are just now seeing the beginning of the U.S. declining oil production as a result of the drastic decline in active drilling rigs. I believe the rate of decline will accelerate as we move through the summer.