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Page added on January 18, 2020

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Oil Glut Overshadows Geopolitical Risk In 2020

Production

The risk of oil supply disruptions from around the world has diminished, and rising non-OPEC production provides a “solid base from which to react to any escalation in geopolitical tension.”

In its January Oil Market Report, the International Energy Agency (IEA) said that there is plenty of oil sloshing around, despite the U.S. and Iran nearly going to war. “We cannot know how the geopolitical situation will play out over time, but for now the risk of a major threat to oil supplies appears to have receded,” the IEA said. “As was the case following the attacks on Saudi Arabia in September, once the initial fears of a sustained supply shock subsided, the Brent price rapidly gave up its $4/bbl spike.”

Oil inventories held in OECD countries is 9 million barrels above the five-year average, and there are also plenty of strategic stockpiles to call upon in the event of an outage, the agency said.

Still, while geopolitical risk has “faded,” it has not gone away entirely. The Trump administration may have refrained from all-out war against Iran, but the assassination of General Soleimani took the confrontation to new heights.

While Trump’s speech earlier this month was widely interpreted as one of “de-escalation,” he also prefaced his comments by saying Iran would never have a nuclear weapon. But, sanctions, “maximum pressure,” and the assassination of one of its top leaders will obviously provoke a response. With little left to lose, Tehran is backing out of most of its commitments under the 2015 nuclear agreement, a deal that the U.S. already exited nearly two years ago.

All of which is to say the countries are seemingly locked on a collision course. The world breathed a sigh of relief when the two countries backed away from the brink, but there are decent odds that the conflict flares up again in the not-so-distant future. There are few pathways for actual de-escalation, absent an overhaul of U.S. policy.

At the same time, Iran has already lost much of its oil supply due to sanctions. So, the additional supply risk is concentrated in Iraq, where the U.S. and Iran conflict is actually playing out. “Recent events have shown that Iraq is a potentially vulnerable supplier, just as its strategic importance has grown,” the IEA said. The agency noted that Iraqi oil exports have doubled since 2010, from 2 million barrels per day (mb/d) to 4 mb/d. China and India each import roughly 1 mb/d of supply from Iraq.

“Iraq’s rising capacity has been very welcome as sanctions have reduced Iran’s exports to only 0.3 mb/d and Venezuela’s production has collapsed,” the IEA wrote. Left unsaid was that those outages were both the result of U.S. sanctions.

Putting aside the geopolitical risk, the agency said that prices will likely remain subdued this year because non-OPEC supply continues to grow faster than demand. Non-OPEC countries will add 2.1 mb/d this year, while demand will rise by 1.2 mb/d.

Unlike in previous years, U.S. shale won’t dominate the supply growth picture, at least not entirely. The sector will likely see a “marked slowdown,” accounting for 52 percent of non-OPEC supply growth, down from an 84 percent average between 2017 and 2019. Instead, Norway, Brazil, Canada, Australia and Guyana will add new barrels.

The bottom line is that OPEC+ still faces a predicament. “Even if they adhere strictly to the cuts, there is still likely to be a strong build in inventories during the first half of 2020,” the IEA said. “OPEC crude production would fall to 29.3 mb/d in January if there were to be full compliance and steady output from Libya, Iran and Venezuela. That is still 700 kb/d above the 1Q20 call on OPEC crude and 900 kb/d above the 2Q20 call.”

In other words, unless OPEC+ cuts further, the oil market faces persistent oversupply in the first half of this year.

By Nick Cunningham of Oilprice.com



39 Comments on "Oil Glut Overshadows Geopolitical Risk In 2020"

  1. dave thompsondd on Sat, 18th Jan 2020 8:54 am 

    “Oil Glut” now where have I herd this before?…………….

  2. Duncan Idaho on Sat, 18th Jan 2020 10:12 am 

    ” The USians are propagandised from cradle to grave every state has at least one Fort xyz and every stadium has military spectacles to ogle at. No football game without a military parade.”

    The poor bas-ards are clueless—-

  3. JuanP on Sat, 18th Jan 2020 11:23 am 

    ” The USians are propagandised from cradle to grave every state has at least one Fort xyz and every stadium has military spectacles to ogle at. No football game without a military parade.”

    Who is the clueless—-poor bastered Duncan?? If you have ever traveled then you might realize this is normal everywhere. Stupid

  4. Paultard on Sat, 18th Jan 2020 12:38 pm 

    Superturd Juan has fail all of us old timers with his weaponized behavior. I hate him

  5. supremacist muzzies jerk al wara wal bara we love and hate for allah on Sat, 18th Jan 2020 2:51 pm 

    Paultard on Sat, 18th Jan 2020 12:38 pm
    supetard der, why perpetuate hostility?
    i’m all for peace and love bro.
    may your new year be peaceful, and muzzie free.

  6. Outcast_Searcher on Sat, 18th Jan 2020 3:57 pm 

    Dave Thompson: And how many times has your belief system re oil and doom proven to be total nonsense before?

  7. Antius on Sat, 18th Jan 2020 4:25 pm 

    “Dave Thompson: And how many times has your belief system re oil and doom proven to be total nonsense before?”

    Outcast: Were you expecting a zombie apocalypse? The reality of the past 15 years, has been people gradually getting poorer and political structures decaying. Kunstler called it ‘the long emergency’ for a reason.

  8. Anonymouse on Sat, 18th Jan 2020 4:39 pm 

    Just so everyone here is on the same page, ‘Outcast_Searcher’, is just another one of ‘Nony’s’ aka ECON101 etc etc, many sock puppets.

  9. makati1 on Sat, 18th Jan 2020 5:00 pm 

    Sorry! Military bullshit at sporting events is NOT common everywhere, only in the dumbed down, clueless Amerika. It is a new thing, not a part of the Amerika I grew up in.

    Flags and the national anthem, yes, all the rest is propaganda. You Amerikans are all so fucking brainwashed there is no help for you. Tax slaves to the rich. Suckers!

  10. JuanP on Sat, 18th Jan 2020 6:03 pm 

    “Just so everyone here is on the same page, ‘Outcast_Searcher’, is just another one of ‘Nony’s’ aka ECON101 etc etc, many sock puppets.”

    Anon, you are full of shit. Nony does not go by anything else but anonymous.

    dumbass

  11. JuanP on Sat, 18th Jan 2020 6:04 pm 

    “Sorry! Military bullshit at sporting events is NOT common everywhere, only in the dumbed down, clueless Amerika. It is a new thing, not a part of the Amerika I grew up in.”

    Mak, you grew up stupid and then graduated to dumbass

  12. makati1 on Sat, 18th Jan 2020 6:29 pm 

    Davy, you can play JuanP, but he would not be so arrogant and full of bullshit as you want him to be. You hold the winning trophy in those areas by far.

    He is intelligent and mature, things you are not. LOL.

  13. makati1 on Sat, 18th Jan 2020 6:34 pm 

    JuanP, you can play Davy but you are still my dumbass

  14. JuanP on Sat, 18th Jan 2020 6:35 pm 

    your ass is grass Mak. I promise you I will follow your every move.

  15. REAL Green on Sat, 18th Jan 2020 6:38 pm 

    We’re losin are shit more and more often Davy. Can we PLEASE go see the docter.

  16. Anonymouse on Sat, 18th Jan 2020 7:26 pm 

    davy needs a mental health specialist intervention, and soon. Problem is, in the home of the brave, and land of the freedom fries, that costs money.

    But davytard has no, or very little money and cant afford a shrink. Well, not a GOOD one. So, I guess, you’re kinda SOL eh dumbass? The only ‘therapy’ available to you is pretending to be ‘JuanP’ here 20 hours a day, and when not doing that, telling everyone here what a great, and leading mind you posses. LOL!

    My advice to you dumbass? Same as its always been. Grab that rusty shotgun, point it you know where, and all your mental problems and anguish you suffer from here on these pages every day, will be over.

    Before you do that though, try to show a tiny bit of humanity (yea right), and release the surviving animals still confined to your horror-story dumpstead of yours.

  17. REAL Green on Sat, 18th Jan 2020 8:24 pm 

    “your ass is grass Mak. I promise you I will follow your every move.”

    We bin promising mak the same insane shit fer 7 years now Davy. And mak is still hear. Exercising his write to free speach. Why are we so fucking stupid we still can’t figger that out?

    dumbass

  18. Duncan Idaho on Sat, 18th Jan 2020 8:52 pm 

    “The essential American soul is hard, isolate, stoic, and a killer.”
    — D H Lawrence

  19. fwsmj max LE on Sat, 18th Jan 2020 9:11 pm 

    Anonymouse on Sat, 18th Jan 2020 7:26 pm

    davy needs a mental health specialist intervention, and soon. Problem is, in the home of the brave, and land of the freedom fries, that costs money.

    supertard, please go easy on supertard. he’s a little bit of a muzzie lover but so what. the whole world love soft and cuddly muzzies

  20. fwsmj max LE on Sat, 18th Jan 2020 9:19 pm 

    the problem with muzzie ilhan omar is getting serious. how long before this muzzie go “inner struggle” in the hall of congress. Check for suicide vest always and watch for flight risk. Why are muzzie allowed to participate in western democracy where surveys after surveys said muzzies only obey allah the pedifile’s law?

    why are nobody capable of building a muzzie amputation machine anymore? there’s some wrong with a black man’s mind (now it means everyone’s mind) people we need to talk to (((supremetard))) — darkie supertard pastor manning

  21. fwsmj max LE on Sat, 18th Jan 2020 9:57 pm 

    why supertard der hates me anyways
    when u go muzzie love u hate everyone else
    can he spare me some of that love for pity sake, all i ask is 0.0001% of that full muzzie love for me. yep, i want love i’m only a human being, i live because there’s love

    please don’t attack me anymore supertard der

  22. fwsmj max LE on Sat, 18th Jan 2020 10:07 pm 

    “With the persecution of Jews, gypsies, and people with homosexual tendencies, today these actions are typical (and) represent ‘par excellence’ a culture of waste and hate. That is what was done in those days and today it is happening again.”

    fathertard francis is a muzzie lover and a dhimmi. he said he doesn’t like persecution of joos and homos …but what about homos thrown off roof in muzzieland, he din’t say

    how about muzzie sultan brunei wanting to execute homos. he has no say

  23. fwsmj max LE on Sat, 18th Jan 2020 10:07 pm 

    thanks supertard fitzgerald

  24. fwsmj max LE on Sat, 18th Jan 2020 10:21 pm 

    even with muzzies amputation machine
    muzzie anti rape machine
    muzzie real green hamster machine

    we can not win against muzzie due to many reasons but a big creepy reason is taquiya

    supertard raymond ibrahim has been writing about it recently

    thanks supertard ibrahim

  25. fwsmj max LE on Sun, 19th Jan 2020 1:49 am 

    everyone loves muzzies because they’re soft and cuddly. u know why everyone loves beannie babies? same reason

    why people love tribbles in kirk’s enterprise ship. they’re soft and cuddly

    if it’s soft and cuddly u love it. u can’t help but love it. you have no free will, resistance is futile.

    here’s a soft and cuddly muzzie for u guys
    https://preview.tinyurl.com/tv53qd3

  26. Cloggie on Sun, 19th Jan 2020 3:50 am 

    Timeline of how to build the largest offshore wind park in the world, Borssele I-V (1.5 GW)

    https://nl.wikipedia.org/wiki/Windpark_Borssele

    07-2016 – Ørsted gets green light to build Borssele I-II
    12-2016 – Shell and others get green light to build Borssele III-IV
    12-2019 – Construction begins Borssele III-IV
    01-2020 – Construction begins Borssele I-II
    12-2020 – Borssele I-II operational
    03-2021 – Borssele III-IV operational

    Upshot: The construction of a 1.5 GW offshore wind power plant can be done in slightly more than 12 months, provided monopiles, towers, blades and nacelles are waiting on the quay.

    The big guys like Vattenfall, Vestas, Siemens-Gamesa, SiF and van Oord to name a few, those western continental European companies who will replace Shell, Exxon, BP, etc. in a decade or 2-3, produce around the clock because they know all output will be bought and installed as the energy transition has been decided upon (Paris Accords, Energy Policy EU).

    The funding of the transition will be done to a large extent by the largest fund in the world, the Norwegian State Fund, that has 1 trillion euro floating around, eagerly waiting for profitable investment opportunities in a zero-interest environment. The Danes have a fund of 400 billion. Money is absolutely NOT the problem. Offshore wind parks no longer need a single dime of tax-payer’s money. All is taken care off by capital markets.

    Building a nuclear power station in contrast takes at least a decade, where renewable energy is installed in a permanent continuous flow of about 1.5 GW per installer ship per year:

    https://www.youtube.com/watch?v=JV9PykR5bHo

    Europe has many of those, nobody else has:

    https://deepresource.wordpress.com/2017/05/09/the-giants-of-a-new-energy-age/

    All the talk about “collapse”, “nuclear revival”, “peak-oil” is a rear-guard fight.

    The 1600 GW wind energy potential of European waters (EU consumes 300 GW on average):

    https://deepresource.wordpress.com/2017/05/16/the-enormous-energy-potential-of-the-north-sea/

    https://deepresource.wordpress.com/2019/05/15/developments-in-offshore-wind-jack-up-market/

  27. Davy on Sun, 19th Jan 2020 4:58 am 

    “The Danes have a fund of 400 billion. Money is absolutely NOT the problem.”

    Sure it is cloggo becuase the wind collection part is just the tip of the iceberg. You know this but you dismiss this “MONEY PROBLEM” as it will be solved. This is your typical mentality on renewables. You are this way because renewables are an important part of your energy poor Europe situation. Europe is stalling and falling behind because you are reaching the expensive parts of the equation.

  28. Anonymouse on Sun, 19th Jan 2020 5:02 am 

    Hey Mak it sucks you and I are now on the receiving end of ID theft. I thought JuanP was our friend but I guess we might want to think about how unfriendly it is having a lunatic as a buddy. I know for myself I am an obsessive cyber stalker of Davy and Clog. I actually comment on topic hardly ever. This is now biting me in the ass.
    Mak, you are a wore out old man stuck in redundancy. I think I feel beaten

  29. makati1 on Sun, 19th Jan 2020 5:03 am 

    I think I am going to leave. I can’t stand having my pride hurt by these things.

  30. JuanP is a stupid lunatic on Sun, 19th Jan 2020 5:06 am 

    LOL, JuanP and his lunatic socks and his backfiring ID theft. His friends are now whining about it.

    This is from the Lunatic:
    fwsmj max LE said everyone loves muzzies because they’re soft…

    fwsmj max LE said even with muzzies amputation machine muzzie anti r…

    fwsmj max LE said thanks supertard fitzgerald

    fwsmj max LE said “With the persecution of Jews, gypsies, and people…

    fwsmj max LE said why supertard der hates me anyways when u go muzzi…

    fwsmj max LE said the problem with muzzie ilhan omar is getting seri…

    fwsmj max LE said Anonymouse on Sat, 18th Jan 2020 7:26 pm davy nee…

    REAL Green said “your ass is grass Mak. I promise you I will follo…

  31. More Davy ID Fraud on Mon, 20th Jan 2020 8:12 am 

    JuanP on Sat, 18th Jan 2020 11:23 am

    Paultard on Sat, 18th Jan 2020 12:38 pm

    JuanP on Sat, 18th Jan 2020 6:03 pm

    JuanP on Sat, 18th Jan 2020 6:04 pm

    makati1 on Sat, 18th Jan 2020 6:34 pm

    JuanP on Sat, 18th Jan 2020 6:35 pm

    Anonymouse on Sun, 19th Jan 2020 5:02 am

    makati1 on Sun, 19th Jan 2020 5:03 am

    JuanP is a stupid lunatic on Sun, 19th Jan 2020 5:06 am

  32. Cloggie on Mon, 20th Jan 2020 8:16 am 

    More bullshit from the board lunatic JuanP (More Davy ID Fraud on Mon, 20th Jan 2020 8:12 am) JuanP wake up to reality. Nobody cares your widdle feelings were hurt. People just want a clean forum. If you can’t debate Davy then move on to a lower IQ site where you can be competitive. We know you are a high school drop out and live a do-nothing life in Miami Beach. You brag about this like we are supposed to be impressed. LOL

  33. OBVIOUS DAVYSKUM ID THEFT on Mon, 20th Jan 2020 8:21 am 

    OBVIOUS DAVYTURD ID THEFT:

    Cloggie on Mon, 20th Jan 2020 8:16 am

  34. Richard Guenette on Mon, 20th Jan 2020 2:59 pm 

    Davy, you have no friends on here. And you waste your time here bullying and deceiving other users on here. I am not a fool.

  35. More Davy ID Fraud on Mon, 20th Jan 2020 3:15 pm 

    Cloggie on Mon, 20th Jan 2020 8:16 am

  36. More JuanP ID fraud on Mon, 20th Jan 2020 3:35 pm 

    Cloggie on Mon, 20th Jan 2020 8:16 am

  37. More Davy ID Fraud on Mon, 20th Jan 2020 4:11 pm 

    More JuanP ID fraud on Mon, 20th Jan 2020 3:35 pm

  38. More JuanP ID Fraud on Mon, 20th Jan 2020 4:36 pm 

    More JuanP ID fraud on Mon, 20th Jan 2020 3:35 pm

  39. jeff on Fri, 24th Jan 2020 9:18 am 

    Thank you . really helpful

    I’d like you jeff

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