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Page added on February 18, 2018
Surge in global oil supply may overtake demand in 2018
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.
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.
Oil demand grew at a rate of 1.6 million bpd in 2017, the IEA said in its monthly market report.
However, 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.
“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.
“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. By the end of this year, it might also overtake Russia to become the global leader.”
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.
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.
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.
For 2017 as a whole, inventories fell by 154 million barrels, or at a rate of 420,000 bpd. 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.
“With the surplus having shrunk so dramatically, the success of the output agreement might be close to hand. 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.”
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.
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.
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.
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.
“If so, most producers will be happy, but if not, history might be repeating itself,” the IEA said.
22 Comments on "Surge in global oil supply may overtake demand in 2018"
Boat on Mon, 19th Feb 2018 12:34 am
http://www.bcse.org/
joe on Mon, 19th Feb 2018 5:21 am
If the glut returns in the way it was then its curtains not only for oil but for the middle east. With Israel all but energy independant due to gas and nuclear, we can see the potential for a coming readjustment of global alliances. If the US wanted to sort out issues vis a vis Iran and closing the straights of Hormuz then this period is the time to do it. The ones most likely to suffer would be Americas global competitors, the EU and China.
tita on Mon, 19th Feb 2018 6:11 am
“could”, “might”, “if”, “may”. There are so much uncertainties in this article. This reflect how analysts have no idea of the direction of oil markets in the short term. So, not much change in prices until the oil inventories show a clear direction.
Davy on Mon, 19th Feb 2018 7:11 am
I have said this 100 times the future of oil is an economic condition today. It is no longer more about the resource it is now more about the economy. At one time oil made wealth. Now wealth is required to make oil. That is a huge difference. We now “MUST” be affluent and productive to have oil. This is the problem with most articles today on the subject. The economy is considered a constant in the discussion. This is kind of like how economist have always treated energy. Economist see energy as a constant because of innovation and substitution. Oil discussions treat the economic condition of civilization as a constant when discussing oils future. They consider 2%-5% average growth as the normal because, you know, it has always been that way.
Habituation dominates this part of the discussion. In fact there is no discussion of the economics. The alternative media talks about it but the mainstream rarely does. If it does it is hammered down by the cornucopians immediately as an existential threat or attack on their fragile narrative of the manifest destiny of growth and development. Most of these folks will acknowledge depressions and financial decline but it is always something we will go into and come out of. This is the problem with forecasting oil today with all sources I see. This is amazing to me and is the epitome of denial. It is an extreme of denial and the folly of ‘forecast’, ‘prediction’ and ‘projection’ with this foundational element of civilization?
Dredd on Mon, 19th Feb 2018 7:58 am
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“Surge in global oil supply”
It is the scourge that has whipped civilization (On the West Side of Zero – 2).
Surge in global oil supply
Surge in global oil supply”
rockman on Mon, 19th Feb 2018 9:27 am
Dave – My view varies somewhat. Pre-WWII the US was not much of an economic powerhouse. Consider the US depression. Many European countries along Japan were doing much better. But after the war the situation g reversed itself: much of Europe and Asia was a pile of rubble while the US emerged with a huge industrial machine thanks to the domestic war effort. And to feed that machine we had an explosion of new oil fields developed especially in Texas. Along with those fields and the giant East Texas Field the US became the Saudi Arabia of the day: not only as THE oil exporting country but thanks to the TRRC also set the price of oil.
And kept that price set at a level that feed the booming manufacturing economy but also allowed continued development of new technology/oil fields that kept the country growing. Which fits your proposition that an economy must be affluent and productive to have oil. And the US has held (and continues today) that position for the last 70 years. Which is why our 5% of the global population has consumed 20%+ of the global oil production.
And why the US remains the biggest oil consumer on the planet even with prices still higher then the historic average. Of course we have China on our heels. And will likely pass the US in the future IMHO. And do so the same way the US dominated the market during the last half of the 20th century: manufacturing.
Oil has been the grease that has kept the economic machines running the hopes of the greenies will continue doing so for many years. Including when we’ve passed global PO. But only those economic machines that can still acquire the remaining oil.
fmr-paultard on Mon, 19th Feb 2018 10:40 am
dear supertards, there’s a lot of talk about the euro “confederation”, russia, and china. but seriously, what came out of russia? NOTHING? wouldn’t it be a justification to turn over Siberia for the US to develop something that benefits hunanity as a whole?
What about China? Last I heard, they’re spying to steal our supertards techs.
Shogun doctrine both of them. I want my supertards in the US so I have safe electricity please.
fmr-paultard on Mon, 19th Feb 2018 10:43 am
(mm) you want to grab Luke 22:36 so you can march with Linda Sarsour in happy sharia law forever? supertards developed modern democracy which is a form of politics that’s best to accomodate everyone not just supremacist muslims.
yes, this is the extremist doctrine because when they kill non muslims they really express indignation that they are not treated as masters of humanity.
i’m a tard i don’t kid you so you can just research yourself.
fmr-paultard on Mon, 19th Feb 2018 10:50 am
just because they’re cave dwellers doesn’t mean they can’t consider themselves supremacists. you’re naive about islam in America. When the nation of islam started, a whole bunch of black people became supremacists even though they aren’t super human physically and mentally.
fmr-paultard on Mon, 19th Feb 2018 10:55 am
do you think our supertards in the US sit on our thumbs or being mediocres like the canadians who are not known anywhere outside of the US. most americans don’t even know where canada is.
so tell me why is canada significant? like Russia, nothing came out of it. NOTHING
What is the comparision of canadian diplomatic corps vs US diplomatic corp. There is no comparision thanks to the work of our supertards.
thank you for reading my rants
bobinget on Mon, 19th Feb 2018 12:10 pm
Shale requires CONSTANT drilling to be productive. Translated, no LT income in shale.
https://www.cnbc.com/2018/01/29/exxon-mobil-to-invest-50-billion-in-us-over-5-years-citing-tax-reform.html
$70. plus needed to profit from shale.
https://www.cnbc.com/2017/07/17/energy-fund-losses-oil-and-gas-investment.html
https://www.cnbc.com/2017/12/14/reuters-america-investors-pour-cash-into-u-s-shale-despite-questions-on-returns.html
The hard truth, w/o long term higher oil prices
fewer suckers invest.
bobinget on Mon, 19th Feb 2018 12:29 pm
War, a powerful game changer. In point of fact, a game ender.
nine hours ago:
http://www.news.com.au/world/middle-east/tensions-between-israel-and-iran-continue-to-escalate/news-story/bc9cd2d783ec4f8f0d0c1fccdeee2f40
Players roster; Russia/Iran/Iraq/Syria/ Vs USA/
Saudi Arabia/Israel (main players)
3 hours ago
https://www.rt.com/newsline/419234-israel-iran-tensions-lavrov/
IMO it’s ME war mongering driving oil prices at this point. Not supply or demand.
Putin, richest man in world, needs to decide
to back little nuclear powered Israel or oil rich Iraq.
Israeli POV:
https://www.haaretz.com/israel-news/.premium-putin-s-syrian-dilemma-back-israel-or-iran-1.5828014
Either way, if Iranian and Iraqi oil are out of the way, Russian (& US) oil companies stand to profit.
There’s even talk of US closing off all shipments
of Iranian oil. (blockades are casus belli)
My advice, stock up on iodine pills.
MASTERMIND on Mon, 19th Feb 2018 12:34 pm
Bobinget 70 needed my ass..Last year all the shale cheerleaders were crowing just 55 is needed when prices were around 45..Now the prices go up and the goal posts are moved again.. They couldn’t make any money at 100 before so its likely no different now.
Cloggie on Mon, 19th Feb 2018 12:37 pm
I think that Shell hit the nail when they said the other day that they think that oil prices will remain low, because everybody wants to sell as much as possible in the light of peak oil demand and avoid being stuck with “stranded assets” (oil still in the ground, wallet empty).
Renewable energy is next. Bye-bye oil age. Shell implicitly said so.
bobinget on Mon, 19th Feb 2018 12:45 pm
LOOP LLC has successfully completed the first Very Large Crude Carrier (VLCC) crude oil loading operation at its Deepwater Port, 18 miles offshore of Port Fourchon, La.
“We are pleased to offer the enhanced capability to safely and efficiently load the largest cargo vessels in the world with crude oil for export,” said Tom Shaw, LOOP president. “There could not be a better time to offer this service as domestic production surpasses 10 million barrels per day in the ever dynamic global crude oil market.”
LOOP is the only U.S. Port capable of fully loading a VLCC, which helps optimize America’s energy supply chain by enabling inbound vessels delivering foreign crude oil to leave LOOP with U.S. crude oil, rather than returning empty.
“The new onloading configuration was accomplished with only minor modifications to existing facilities and is scalable to meet the changing needs of the industry,” Shaw added.
Houston-based Shell Trading Company US (STUSCO) was the shipper of record for this historic cargo. LOOP, which has successfully offloaded more than 10,200 crude oil vessels since commencing operations in 1981, is currently preparing its 2018 shipping schedule.
https://www.loopllc.com/Announcements/Announcements/LOOP-LLC-has-successfully-completed-the-first-Very
Who needs ‘STINKIN IMPORTS?’ (Most of this US exported oil did not come from here)
https://www.haaretz.com/israel-news/.premium-with-eye-on-iran-israel-increases-military-support-for-syrian-rebels-1.5826348
bobinget on Mon, 19th Feb 2018 1:16 pm
And now for something really different;
https://twitter.com/LastWeekTonight
MASTERMIND on Mon, 19th Feb 2018 1:39 pm
Clogg
UC Davis Peer Reviewed Study: It Will Take 131 Years to Replace Oil with Alternatives (Malyshkina, 2010)
http://pubs.acs.org/doi/abs/10.1021/es100730q
University of Chicago Peer Reviewed Study: predicts world economy unlikely to stop relying on fossil fuels (Covert, 2016)
https://www.aeaweb.org/articles?id=10.1257/jep.30.1.117
Solar and Wind produced less than one percent of total world energy in 2016 – IEA WEO 2017
https://www.iea.org/publications/freepublications/publication/KeyWorld2017.pdf
Fossil Fuel Share of Global Energy since 1990 – BP 2017
https://imgur.com/k7VecMq
IEA Sees No Peak Oil Demand ‘Any Time Soon’
https://www.wsj.com/articles/iea-sees-no-peak-oil-demand-any-time-soon-1488816002
OPEC sees no peak oil demand from EVs before 2040
https://www.platts.com/latest-news/oil/london/interview-opecs-barkindo-sees-no-peak-oil-demand-21357073
Sorry IEA and OPEC says no peak oil demand anytime soon..But there will be plenty of peak oil supply coming! LOL
bobinget on Mon, 19th Feb 2018 1:47 pm
On topic;
Oil demand growth for 2018 seen at 2.01 mil b/d, according to @SPGlobalPlatts Analytics.
Oil demand growth for 2018 seen at 2.01 mil b/d, according to @SPGlobalPlatts Analytics. Demand growth outstripping refinery capacity growth, Chris Midgley says at #PlattsLOF. #OPEC #OOTT #oil
Sissyfuss on Mon, 19th Feb 2018 8:44 pm
Forget the energy crap, Cloggedinjectors. Iran and Israel are rattling sabers at each other of the nuclear kind. What you gonna do about it?
Cloggie on Mon, 19th Feb 2018 11:00 pm
“Forget the energy crap, Cloggedinjectors. Iran and Israel are rattling sabers at each other of the nuclear kind. What you gonna do about it?”
Europe has 10,000 wide body airplanes, with which we can transfer the Israeli mob to tent cities in New York State (or the bottom of the Grand Canyon) in a matter of a few days, en passant confiscating Israeli nukes, the ones that JFK sought to prevent and got him killed.
That’s what we are going to do about, Sister Act.
Kat C on Wed, 21st Feb 2018 3:45 am
This clip of James Woolsey is making the rounds because of what he says about regime change, but listen to what he says about manipulating oil price for political reasons at about 2:20.
Kat C on Wed, 21st Feb 2018 3:45 am
Sorry forgot the link
https://www.youtube.com/watch?v=SpWai3kZ-gM