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Page added on March 17, 2019

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How likely is an oil-led market crash?

Production

There’s a bullish outlook for oil even though there are a growing number of potential factors that could undermine demand in coming years.

Despite these problems from trade wars, Brexit and China’s slowing growth rate, the International Energy Agency (IEA) still sees global oil consumption rising 6% over the next five years.

And it sees the US as being the one producer with the capacity to meet that six million barrel a day rise.

Total oil demand will increase from 100.6 million barrels a day (b/d) in 2019 to 106.4 million b/d in 2024. Jet fuel, as a growing number of people around the world travel by air, and petrochemicals, which are used in plastics, will keep oil demand robust, the IEA said.

But the Agency said that despite all the possible hiccups and barriers, there no sign of a peak in oil demand.

“While global oil demand growth is set to ease, in particular as China slows down, it still increases an annual average of 1.2 mb/d to 2024, the IEA said.

The agency said it “continues to see no peak in oil demand, as petrochemicals and jet fuel remain the key drivers of growth, particularly in the United States and Asia, more than offsetting a slowdown in gasoline due to efficiency gains and electric cars.”

In its annual report and forecast, released on Monday, the IEA warned that Brexit could hit oil demand if the departure is ‘disorderly’ (ie a so-called hard Brexit, which is starting to look very possible).

On top of this, the US trade wars with China, Canada, Mexico, and the EU could add to global uncertainty which would, in turn, undermine demand for oil.

“Ongoing trade disputes between major powers and a disorderly Brexit could lead to a reduction in the rate of growth of international trade and oil demand,” the Paris-based intergovernmental organisation said on Monday.

These factors could amplify the slowdown in demand growth between 2019 and 2024 that the IEA expects, largely led by a slowdown in Chinese consumption.

“The economic mood is not encouraging,” it added.

“Confidence in the health of the world economy has deteriorated,” the IEA said.

“Tighter financial conditions, rising trade tensions, slowing Chinese growth and a deceleration in global industrial activity have damped optimism,” the IEA said. Still, even as the rate of consumption moderates there “is no peak in sight” for absolute demand, the IEA said.

The Agency said that on the supply side the US will be the biggest influence over the next five years.

“The United States will drive global oil supply growth over the next five years thanks to the remarkable strength of its shale industry, triggering a rapid transformation of world oil markets according to the IEA’s annual forecast.

“By the end of the forecast, oil exports from the United States will overtake Russia and close in on Saudi Arabia, bringing greater diversity of supply,” the IEA said.

“The United States is increasingly leading the expansion in global oil supplies, with significant growth also seen among other non-OPEC producers, including Brazil, Norway and new producer Guyana.

“It is due to the ability of the US shale industry to respond quickly to price signals by ramping up production. The United States accounts for 70% of the total increase in global capacity to 2024, adding a total of 4 mb/d. This follows spectacular growth of 2.2 mb/d in 2018,” the IEA said.

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21 Comments on "How likely is an oil-led market crash?"

  1. shortonoil on Sun, 17th Mar 2019 11:53 am 

    “The United States accounts for 70% of the total increase in global capacity to 2024, adding a total of 4 mb/d.”

    Between Shale and conventional the world has a legacy decline rate of about 4 mb/d. No matter how the IEA attempts to dance around the facts, the world has reached Peak.

  2. Cloggie on Sun, 17th Mar 2019 12:13 pm 

    Between Shale and conventional the world has a legacy decline rate of about 4 mb/d. No matter how the IEA attempts to dance around the facts, the world has reached Peak.

    Not true.

    Outside the US there is an entire planet to frack.

  3. Davy on Sun, 17th Mar 2019 12:21 pm 

    “Not true.” “Outside the US there is an entire planet to frack.”

    There is likely a solar system to frack too. Good point cloggo.

  4. Davy on Sun, 17th Mar 2019 1:26 pm 

    Oops, sorry everyone for the ludicrous comment above.

    Good point Cloggie. In the US we shot our wad in conventional oil in ‘73, and we’ll be the first to blow our wad in fracking within a few short years from now.

    The rest of the world will no longer continue to allow us to pillage their oil. It’s all downhill for the empire from here on end.

  5. JuanP pretending to be Davy on Sun, 17th Mar 2019 3:15 pm 

    JuanP

    Davy on Sun, 17th Mar 2019 1:26 pm

  6. Davy Pretending JuanP is Pretending to be Davy on Sun, 17th Mar 2019 4:16 pm 

    JuanP pretending to be Davy on Sun, 17th Mar 2019 3:15 pm

  7. Pathological liar JuanP on Sun, 17th Mar 2019 4:58 pm 

    Davy Pretending JuanP is Pretending to be Davy on Sun, 17th Mar 2019 4:16 pm

  8. Davy on Sun, 17th Mar 2019 4:59 pm 

    Up the butt, then through the penis.

  9. JuanP on Sun, 17th Mar 2019 5:01 pm 

    Bitches I’m back from pulling weeds. Time to fuck with the exceptionalist. I hope you don’t mind me being dirty. I don’t give a shit anyway ROTFL. Fuck you

  10. Mitch on Sun, 17th Mar 2019 5:02 pm 

    JuanO, this is your sock Mitch. Welcome back jack. Where is your lover Boney Joe?

  11. Truth Buster on Sun, 17th Mar 2019 5:04 pm 

    JuanP is a fuck nut

  12. The truth will set you free on Sun, 17th Mar 2019 5:05 pm 

    Ditto that Trth Buster

  13. Davy on Sun, 17th Mar 2019 6:57 pm 

    Oops, sorry everyone. I seem to have lost my mind.

  14. Mitch on Sun, 17th Mar 2019 7:12 pm 

    Hi juanP, quit being a coward. Go back to Venezuela and be a real man and fight for your country.

  15. Mitch on Sun, 17th Mar 2019 8:47 pm 

    Stop stealing everyone’s identities Davy.

  16. Sunspot on Mon, 18th Mar 2019 3:50 pm 

    An article about how the stupid humans are committing suicide and all you morons can do is piss on each other. Sad

  17. Antius on Mon, 18th Mar 2019 9:06 pm 

    Interesting contrast between the British and U.S. empires. I sometimes wonder what my country could really achieve were it not shackled by a useless kosher government.

    https://tinyurl.com/y6yzwrbz

  18. Mark Ziegler on Mon, 18th Mar 2019 11:49 pm 

    So lets say US Shale will last 100 years. If so how many wells will have to be drilled by then?

  19. makati1 on Tue, 19th Mar 2019 1:08 am 

    Mark, how many angels can dance on the head of a pin? Same answer: who knows? I have serious doubts that shale production is going to last five years and certainly not 100. It runs on debt, not profits. When the SHTF it is going to go belly up quick and never recover.

    BTW: At the rate of climate change, oil is going to be the last thing any of the few humans remaining are going to think about by 2100, only 80 years away. Food and shelter will be the order of the day, not those ancient energy toys, now almost forgotten.

    The more intelligent may actually curse us for our wasteful use of such an important and valuable resource that caused their situation.

  20. makati1 on Tue, 19th Mar 2019 1:20 am 

    “Beijing issues its own on the deplorable state of human rights in America.”

    “Countless numbers of school shootings occur annually – 94 last year (2018), killing or wounding 163 people, the worst year on record for these incidents….

    According to the FBI (2018), there were an “estimated 1,247,321 violent crimes, including 17,284 incidents of murder, 135,755 rapes, 810,825 aggravated assaults, as well as 319,356 robberies. “Among the cases, 72.6 percent of murders, 40.6 percent of robberies, and 26.3 percent of aggravated assaults were committed with firearms.”…

    Poverty is America’s leading growth industry. Around half the nation’s households are financially stressed….

    Endless US wars rage, nations attacked for refusing to subordinate their sovereignty to US interests, no end of them in prospect, new ones in the wings to be waged…

    The US is the world’s leading human rights abuser on a global scale, including at home against its poor, people of color, unwanted aliens, Muslims from the wrong countries, and anyone against its rage to rule the world unchallenged….”

    https://www.globalresearch.ca/chinas-documentation-us-human-rights-abuses/5671883

    Article by: Stephen Lendman (lives in Chicago). He knows what the rest of the world thinks of the US. The Chinese just outlined it for him and us. I agree with their evaluations. That is one reason I no longer reside there. I prefer a civilized country with rights and freedoms. 86 and sunny here this afternoon. Going out. See yah tomorrow!

  21. Dredd on Tue, 19th Mar 2019 9:39 am 

    The mounting legal liability scenario should also be considered (Exxon’s Climate Denial Set To Face First Public Scrutiny As Legal Woes Mount).

    Legal liability is something they brought on themselves through deceit and dishonesty.

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