Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on December 14, 2018

Bookmark and Share

Global oil supply to tighten quickly in 2019

Consumption

The Paris-based IEA kept its 2019 forecast for global oil demand growth at 1.4 million barrels per day.

The global oil market could move into deficit sooner than expected thanks to Opec’s output agreement with Russia and to Canada’s decision to cut supply, the International Energy Agency said on Thursday.

The Paris-based IEA kept its 2019 forecast for global oil demand growth at 1.4 million barrels per day, unchanged from its projection last month, and said it expected growth of 1.3 million bpd this year.

Uncertainty over the global economy stemming from US-China trade tensions could undermine oil consumption next year, as growth in supply gathers pace.

“For 2019, our demand growth outlook remains at 1.4 million bpd even though oil prices have fallen back considerably since the early October peak,” the IEA said.

“Some of the support provided by lower prices will be offset by weaker economic growth globally, and particularly in some emerging economies.”

The Organisation of the Petroleum Exporting Countries agreed last week with Russia, Oman and other producers to cut oil output by 1.2 million bpd from January to stem a build-up in unused inventories of fuel.

The decision by the government of Canada’s Alberta province to force oil producers to curtail supply will bring the largest reduction to crude output next year, the IEA said.

Alberta crude and oil sands output will drop by 325,000 bpd from January to force down vast inventories that built up because of pipeline capacity constraints.

The oil price has fallen by nearly a third so far this quarter to around $61 a barrel, from a four-year peak close to $87 in early October.

In its previous report in November, the IEA said it expected the global oil market to remain in surplus throughout 2019. Now, it expects a deficit to materialise by the second quarter of next year, provided Opec sticks to its supply deal.

“Time will tell how effective the new production agreement will be in rebalancing the oil market,” the IEA said. Part of the oil-price weakness in the second half of this year stems from concern about how much an economic slowdown could eat into demand growth. The International Monetary Fund and the Organisation for Economic Cooperation and Development expect the global economy to expand more slowly next year than forecast six months ago.

The OECD in November projected that world economic growth would slow to 3.5 per cent in 2019 from 3.8 per cent this year.

“Uncertainty about trade tensions and tighter monetary policies continue to affect confidence and investment. The OECD’s lower expectation for the world economy in 2019 could reduce oil demand growth by roughly 100,000 bpd,” the IEA said.

khaleejtimes



5 Comments on "Global oil supply to tighten quickly in 2019"

  1. I AM THE MOB on Fri, 14th Dec 2018 10:01 am 

    Shale-Oil Growth Down 30%: That Could Spell $100-Brent In 2019

    International Energy Agency (I.E.A) and Schlumberger have been quietly warning of a potential supply crunch caused by under-investment in conventional oil.

    If the trend in shale-oil growth continues down, the crunch they are talking about could be in 2019.

    Market disruptions are common when new ideas come along; and participants have problems pricing because there are few precedents. Dot.com was an example, so were the derivatives that led to the financial meltdown in 2008.

    There are signs shale oil might turn out to have been a similar story, currently unfolding. What is not commonly understood is because legacy losses are so high, a 10% increase in new production gives a 60% increase in the total shipments, that explains the 2.4 million barrels per day increase in total shale oil shipments over the past two years; that’s more oil than OPEC took off the table. But a 10% drop in new production delivers a 60% drop in shipments.

    There are signs shale oil might turn out to have been a similar story, currently unfolding. What is not commonly understood is because legacy losses are so high, a 10% increase in new production gives a 60% increase in the total shipments, that explains the 2.4 million barrels per day increase in total shale oil shipments over the past two years; that’s more oil than OPEC took off the table. But a 10% drop in new production delivers a 60% drop in shipments.

    According to the latest report by The International Energy Agency (I.E.A.), if U.S. shale oil does not increase production by 1.6 million barrels per day per year, next year, and the year after, and the year after and Amen, there will be a “supply-shock”. The CEO of Schlumberger has a similar view.

    Over the past five months the trend in new-shale oil went from 150,000 barrels per day per month (i.e. average 1.8 million barrels per day per year), to 100,000 (i.e. 1.2 million barrels per day per year); the trend-line is pointing at zero by mid 2019. I believe there is a real risk that the war that OPEC denies they were waging; could have created the World’s Worst Nightmare, with OPEC and Russia as the main beneficiaries.

    The spike to 3.0 million in August 2018 was not all about shale; it was mostly due to offshore oil, sanctioned before the bust, coming on line. There is not much more of that in the pipeline. Notice the down-tick in shale-oil after August.

    Last but not least, is the trend in legacy-loss (red-line), right now shale needs to find 500,000 barrels per day new oil every month, just so as to stay-even; that number is going up; when it equals I.P.; that’s Peak-Shale, in other words, that’s the end of the road.

    Don’t be surprised if peak-shale comes in 2019, and if that happens, don’t be surprised if the supply-crunch the I.E.A. warned of, comes sooner than anyone was expecting.

    https://seekingalpha.com/article/4228060-shale-oil-growth-30-percent-spell-100-brent-2019

    Peak Shale 2019 = global peak oil~

  2. I AM THE MOB on Fri, 14th Dec 2018 10:35 am 

    Air pollution is choking solar energy around the world

    https://www.popsci.com/smog-reduces-solar-energy?fbclid=IwAR1SxAnksG5YAEgj3doGEptc6zoYoQtFvqmH3SHM6RSIaIYY49qGak4IVbI

  3. Chrome Mags on Fri, 14th Dec 2018 11:21 am 

    https://www.theatlantic.com/ideas/archive/2018/08/should-we-dim-the-skies-to-save-the-world/568969/

    The pollution may have to be increased to tackle GW, which of course reduces solar energy.

    “A fleet of jets takes off from airports around the world. They ascend beyond the cruising altitude of commercial airlines until they reach the stratosphere. Then, they spray. A thick stream of sulfuric acid pours forth from the aircraft, bathing the skies in toxic aerosols. Winds spread the noxious cloud around the world, where it lingers for months, even years. The effects down on Earth are unmistakable. On every continent, blue skies are replaced with a pallid veil of white. The Milky Way disappears. There is less sunlight for solar power, more damage to the ozone, and a surge of droughts across southeastern Asia and central Africa. Also, the Earth cools.”

    That would be a cruel irony if as the attempt to transition to renewables/solar is taking place, more dimming is required to reduce global temps.

  4. Davy on Sat, 15th Dec 2018 6:00 am 

    No, The U.S. Is Not A Net Exporter Of Crude Oil
    https://tinyurl.com/yd9k868y

    “Fact Check So, here’s a summary of the important inputs to the balance that resulted in the Bloomberg claim:
    U.S. crude oil production – 11.7 million BPD
    Other supply (NGLs, ethanol, processing gain) – 6.9 million BPD
    U.S. crude oil imports – 7.2 million BPD
    U.S. crude oil exports – 3.2 million BPD
    U.S. finished product imports – 1.6 million BPD
    U.S. finished product exports – 5.8 million BPD
    U.S. petroleum consumption – 20.5 million BPD”

    “total U.S. production of oil and other supply that is fed into refineries is 18.6 million BPD, while U.S. consumption is 20.5 million BPD. That still puts U.S. consumption at nearly 2.0 million BPD more than we produce. (It’s actually a little worse than that, because not all NGLs end up as refinery feedstock). So the bottom line is that we aren’t net exporters of crude oil, and we aren’t energy independent. But, the U.S. has trended in that direction for over a decade. Regardless of whether it remains that way, this is undoubtedly a remarkable achievement. I know a lot of people — including myself — would have scoffed at such a prediction in 2005. By Robert Rapier”

  5. Cloggie on Sat, 15th Dec 2018 2:43 pm 

    “Peak Shale 2019 = global peak oil~”

    Peak shale USA 2019 is not global peak oil.

Leave a Reply

Your email address will not be published. Required fields are marked *