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Page added on May 22, 2019
IEA cuts oil-demand forecast, but sees market tightening on Iran
Global oil demand will grow more slowly than previously thought following an economic lull in Asia, the International Energy Agency said, while warning that supplies stand to tighten due to U.S. sanctions on Iran.
Disappointing fuel consumption in China, Japan and Brazil meant 2019 started with a “tough quarter,” the agency said, lowering its global demand estimate for the first time since October. As a result, world oil inventories surprisingly swelled during the first three months of the year.
Nonetheless, stockpiles are set to plunge sharply this quarter as demand picks up and as U.S. sanctions squeeze production in Iran, which could fall this month to the lowest since the country’s war with Iraq in the 1980s, the IEA said.
“There is a modest offset to supply worries from the demand side,” the Paris-based agency, which advises major economies on energy policy, said in its monthly report. “Even so, slower demand growth is likely to be short-lived, as we believe that the pace will pick up during the rest of the year.”
Oil prices are holding just above $70 a barrel in London as traders await the full impact of American sanctions on Iran, and clarity on how quickly other OPEC members such as Saudi Arabia raise production to offset any losses. Tensions in the Middle East flared this week as Riyadh said two oil tankers and some facilities came under attack.
The IEA slashed estimates for global oil demand in the first quarter by 400,000 barrels a day, and for the year as a whole by a more modest 200,000 a day. As a result, the growth rate for 2019 was lowered by 90,000 barrels a day to a still “healthy” 1.3 million a day.
Because of the unexpected weakness in demand, oil stockpiles ballooned by 700,000 barrels a day in 1Q — about seven times as much as previously estimated — even as the Organization of Petroleum Exporting Countries and its partners reduced production to keep markets balanced.
The surplus though seems about to turn into tightness as demand recovers, the agency cautioned, with inventories poised to decline by a similar amount this quarter. Stockpiles in developed nations fell by 25.8 million barrels in March and in terms of the levels required to meet projected demand, have already slipped to the lowest since July.
19 Comments on "IEA cuts oil-demand forecast, but sees market tightening on Iran"
Cloggie on Thu, 23rd May 2019 3:16 am
“Global oil demand will grow more slowly than previously thought”
We’re approaching peak oil demand.
The per kWh price of fossil and renewable are at a break even (while we still can ignore storage at this early stage) and the devastating environmental consequences of burning fossil fuel have NOT yet been given the proper price. Poor Macron gave it a serious try, but look where it brought him.
The best thing for the planet would be for Donnie to start a war in the Gulf, leaving most of the toxic oil infrastructure there to waste, never to recover again. This would send oil prices through the roof, making Europe irreversibly dependent on Russia for the remaining oil and gas and prompting a renewable energy Bonanza everywhere in Europe and complete the transition before 2030 rather than 2050. And push through autonomous driving.
https://deepresource.wordpress.com/2017/09/30/hans-josef-fell-accelerating-the-global-transition-to-100-renewable-energy/
https://deepresource.wordpress.com/2017/05/16/by-2030-you-wont-own-a-car/
https://deepresource.wordpress.com/2019/05/15/developments-in-offshore-wind-jack-up-market/
https://deepresource.wordpress.com/2019/05/02/fossil-fuel-cars-verboden-in-amsterdam-after-2030/
https://deepresource.wordpress.com/2019/03/19/shell-to-be-the-worlds-largest-electricity-producer-by-2030/
Davy on Thu, 23rd May 2019 4:38 am
Notice any difference:
Clog:
“The best thing for the planet would be for Donnie to start a war in the Gulf, leaving most of the toxic oil infrastructure there to waste, never to recover again. This would send oil prices through the roof, making Europe irreversibly dependent on Russia for the remaining oil and gas and prompting a renewable energy Bonanza everywhere in Europe and complete the transition before 2030 rather than 2050. And push through autonomous driving.”
Davy:
A war in the gulf will destroy the world as we know it and the world will likely never recover. Oil prices may go through the roof then crash because of the drop in economic activity and financial chaos. Europe does not have the means to adjust to Russian supplies quickly so it will be sledgehammered. The renewable energy bonanza that depends on a vibrant global economy will be dead in the water. The transition will be to serious decline and possible collapse not an “energy bonanza”. This is not only a European forecast but global.
print baby print on Thu, 23rd May 2019 5:15 am
We are approaching peak stupidity . The people drive less , just look around you , you don’t have to be rocket scientist to conclude it . They drive less because the economy is in the depression , yes depression not recession . I personally don’t know any person which drive less because it feel like it it is because they can’t afford it to drive more, so peak demand my ass, get it
Dredd on Thu, 23rd May 2019 8:15 am
If you’ve seen one choice you’ve seen them all (How To Enjoy The End Of Bad Choices)?
Robert Inget on Thu, 23rd May 2019 9:18 am
Oil Markets (bravely) Prepare For WAR
http://www.livecharts.co.uk/MarketCharts/crude.php
I should say oil speculators.
Robert Inget on Thu, 23rd May 2019 11:43 am
Todays correction seems driven by paper barrels not realistic numbers.
In oil markets, like everything else theses days, ‘truth’ is a victim found knifed, shot, raped, head smashed with blunt objects, stuffed in dumpster.
President Trump said yesterday “I’m the most transparent President ever,(here’s all my tax returns”).
He followed up with a statement so boldly insane,
for fully 60 seconds, few could take a breath.
” I ‘only’ do cover-ups”.
see how easy!
I put the IEA in a different class.
When IEA lies they believe their lies will keep oil prices in check. It’s like what a diplomatic husband replies when asked “do I look fat in….”
Trump ONY lies to protect himself.
IEA believes shading numbers, here and there, noble acts
If only Venezuela were off line. Then…
If only Nigeria’s exports weren’t lagging. Then…
If Iran were producing more than 500,000 B p/d
If only we didn’t need to import heavy oil ALL the way from Russia to replace Venezuelan goods.
If only Saudi Arabia were as truthful and transparent as our dear leader.
Robert Inget on Fri, 24th May 2019 10:14 am
How could I have forgotten Libya?
https://www.bloomberg.com/opinion/articles/2019-04-25/trump-s-bet-on-libyan-strongman-will-backfire
https://www.wsj.com/articles/trump-backed-libyan-warlord-after-saudi-arabia-and-egypt-lobbied-him-11557668581
Robert Inget on Fri, 24th May 2019 10:29 am
https://news.yahoo.com/how-trumps-embrace-of-a-rogue-libyan-warlord-sparked-a-humanitarian-catastrophe-144505107.html
If mankind survives the next 50 years, historians
will marvel at this era’s final gasps at civilization.
The President of the US is retweeting doctored
videos of The Speaker of the House of Representatives.
https://www.mediaite.com/online/rudy-giuliani-mercilessly-mocked-over-bizarre-ivesssapology-tweet-whos-drunk-now/
Robert Inget on Fri, 24th May 2019 10:40 am
Trump contradicts himself on Huawei in a single sentence, saying the firm is a huge security threat but could also be a bargaining chip in the China trade war.
President Donald Trump has commented in detail for the first time on the Huawei firestorm after his administration blacklisted the Chinese tech giant last week.
His administration has been trying to treat Huawei and the trade dispute as separate issues, but Trump has now repeatedly undermined this effort.
https://www.businessinsider.com/donald-trump-huawei-security-threat-trade-deal-pawn-2019-5
(this is the man controlling YOUR future)
Duncan Idaho on Fri, 24th May 2019 10:52 am
“Corrupted by wealth & power, your government is like a restaurant with only one dish. They’ve got a set of Republican waiters on one side & a set of Democratic waiters on the other side. But no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen.”
— Huey Long
Robert Inget on Fri, 24th May 2019 11:14 am
Russia forced to cut production One Million B’s
https://www.investorvillage.com/groups.asp?mb=19168&mn=204506&pt=msg&mid=19454549
MARKETS SO TIGHT. It’ll be a wonder if Short Sellers can keep up this fake ‘glut’ much longer.
Russia’s oil production will be cut by another 1 million barrels per day over the next week…contamination unresolved
Mlp repost
Russia’s oil production will be cut by another 1 million barrels per day over the next week after its oil exports were restricted due to contamination issues, according to Reuters.
The contaminated crude oil was shipped through Transneft’s Druzhba pipeline, causing the pipeline operator to call on Russian oil producers to request reduced volumes—a 10 percent reduction.
The contamination issue—which Transneft says was deliberate—has been quite a headache for Russia, but European refineries are taking most of the brunt, and have caused Poland, the Czech Republic, and Hungary to release 8 million barrels of oil reserves to keep their refineries refining, and comes at a time when the market is already nervous about tightening supplies as crude production falls in Iran and Venezuela.
Russia’s oil production had already fallen in April to 11.23 million barrels per day, although the levels were still above its production quota that it agreed to with OPEC of 11.191 million bpd. Russia has dropped hints over the last month that it may be reluctant to extend the oil quotas past June—although it has yet to reduce production to those levels.
Saudi Arabia has vowed to respond to market needs as they arise should a shortage occur, but Saudi Arabia was referring to the production losses in Venezuela and Iran—not Russia.
Mlp repost
Transneft is largely expected to resume oil flows over the next couple of weeks, although it may take some time to repair any damaged refinery equipment as a result of the corrosive
Duncan Idaho on Fri, 24th May 2019 11:47 am
A lot less oil on the market.
Reality will eventually overtake ideology.
Sissyfuss on Fri, 24th May 2019 12:16 pm
As a result of his observations, Huey didn’t last Long.
Davy on Fri, 24th May 2019 1:02 pm
siss, I think I saw a monarch butterfly. Are they on the move this early? I thought it was late summer when they moved.
Davy on Fri, 24th May 2019 1:53 pm
My mistake siss. I finally caught up to it. Turns out it’s one of them flying grasshopper type thingys. It makes a weird clacking noise.
JuanP on Fri, 24th May 2019 2:25 pm
JuanPee posted this
Davy on Fri, 24th May 2019 1:53 pm
My mistake siss. I finally caught up to it. Turns out it’s one of them flying grasshopper type thingys. It makes a weird clacking noise.
Davy Identity Theft on Fri, 24th May 2019 6:39 pm
JuanP on Fri, 24th May 2019 2:25 pm
Robert Inget on Sat, 25th May 2019 10:57 am
Evidence Mounts; Heavy oil becoming Scarce.
(Imports from Russia unreliable)
For some reason traders have lost the ability to tell the difference between ‘real’ oil and condensate rich ‘ultra light’ ersatz.
From an ‘expert’ oilman:
US crude build is due to increased WTL and condensate production
Segregation of API gravity higher than 50 has resulted in increased storage tank capacity and pipeline fills. And so has 45-50 material which is WTL This is actually condensate material that is counted as crude. This is from Energy Aspects. But I do expect the Permian growth to slow down as this stream produces very little middle distillate.
Looking at October 2018 preliminary production figures alone, 8% belonged to the 50–55 API segregation; in previous months of the year that same segregation was under 3%. The 45–50 API segregation has also climbed through the year, primarily in the streams closer to 50 API with several consecutive months confirming the observation. (30)
Conclusion;
The recent six dollar WTI price loss based on a so called ‘glut’ is really based on condensates, not oil.
ALSO; Further evidence, *older* shale wells are ‘gassing-out’ more quickly than expected.
** Most of these wells are depleting double digits
a year faster than drilling cost can be recovered.
BOTTOM LINE
If lifting costs can’t be recovered, what’s the point of drilling new wells to replace money losing old?
It would seem to any sane person faced with such facts, we have several choices;
1) Rejoin the Iran Nuclear Agreement. Cancel all
sanctions based on Iran keeping peace.
2) Borrow money from China to pay-off Venezuela’s, loans. Pay-off Maduro and his generals to move out. Replace Russian oil personal with US. Make soybean/corn farmers ship surplus crops to Venezuela to grow pigs/chickens before receiving any Govt. pay outs.
3) Grow tax incentives for renewables.
4) It’s possible to power diesel heavy equipment directly with compressed natural gas.
5) Increase oil/gas pipelines from Canada before China forces Canada to export ONLY to China.
None of above likely to happen under a Trump/Republican administration.
Instead, we will be under Putin’s thumb for decades to come.
.
Robert Inget on Sat, 25th May 2019 4:01 pm
What does Mike Know that we don’t
https://www.theguardian.com/us-news/2019/may/25/mike-pence-us-military-academy-west-point
Pence takes on Catholics and Muslims at the same time.
Mike Pence tells US military graduates: you should expect to see combat
‘Some of you will join the fight against radical Islamic terrorists’
‘Pence hints at possible military intervention in Venezuela’
Take my words seriously;
It’s ALWAYS about OIL.
Every taxpayer supports an Armed Forces to protect ‘our’ oil. Under Arabian sand or Venezuelan jungle, its OUR oil God-damnit.
.