Tag: Energy Information Administration (EIA)

World Oil Supply, Demand And Price Outlook, November 2018

Posted on by Robert Boslego

The Energy Information Administration released its Short-Term Energy Outlook for November, and it shows that OECD oil inventories likely bottomed in June at 2.807 billion barrels. It estimated a large 20 million barrel gain for October. Though it forecasts that stocks will drop in December to 2.867 billion, that is 50 million barrels higher than in the October outlook.

Throughout 2019, OECD inventories are generally expected to rise, reaching 3.0 billion barrels in August. It projects ending the year with 138 million barrels more than at the end of 2018 in glut territory.

OECD Oil Inventories

The moment of truth has come, and it appears that the sanctions will cut less of Iran’s production and exports than has been added by OPEC+ producers and the U.S. That is why oil prices have been dropping for eight straight sessions.

Oil Price Implications

I performed a simple linear regression between OECD oil inventories and WTI crude oil prices for the period 2008 through 2017. As expected, there are periods where the price deviates greatly from the regression model. But overall, the model provides a reasonably high r-square result of 79 percent. Continue reading "World Oil Supply, Demand And Price Outlook, November 2018" →

U.S. Crude Production Soars In August

Posted on by Robert Boslego

The Energy Information Administration reported that August crude oil production averaged 11.346 million barrels per day (mmbd), up 416,000 b/d from July. The surge was led by a 126,000 b/d increase in Texas and a 74,000 b/d rise in the Gulf of Mexico. In addition, the increases were broadly based, implying a lagged-response to rising oil prices this year has created enough incentive to ignite production. The large rise in Texas was also unexpected due to reported pipeline constraints.

production

production
Continue reading "U.S. Crude Production Soars In August" →

World Oil Supply, Demand And Price Outlook, October 2018

Posted on by Robert Boslego

The Energy Information Administration (EIA) released its Short-Term Energy Outlook for October, and it shows that OECD oil inventories likely bottomed in July at 2.806 billion barrels. It shows inventories rising in the third quarter, contrary to the normal seasonal trend. However, it forecasts that stocks will drop in December to 2.817 billion after the Iranian sanctions are expected to go into effect.

Throughout 2019, OECD inventories are generally expected to rise, ending the year with 98 million barrels more than at the end of 2018. The expected drop in Iranian production, due to the U.S. sanctions, is forecast to be more-than-offset by increases from other producers, such as the U.S., Canada and the Gulf states of Saudi Arabia, Kuwait and the UAE.

oil inventories

Crown Prince Mohammed bin Salman of Saudi Arabia has recently stated that KSA can produce at least 12 million barrels per day. If it does increase output to that level, this would be a major “surprise” to world markets since its production has never exceeded 11 million. Continue reading "World Oil Supply, Demand And Price Outlook, October 2018" →

U.S. Crude Production Sets Records In July

Posted on by Robert Boslego

The Energy Information Administration reported that July crude oil production averaged 10.964 million barrels per day (mmbd), up 269,000 b/d from June. The surge was partly on the back of a rebound of 189,000 b/d in the Gulf of Mexico to a new record high of 1.849 mmbd. In addition, new record-high output was reached in four states: Texas (4.469), North Dakota (1.260), New Mexico (669,000) and Oklahoma (543,000).

U.S. Crude Production Sets Records
Continue reading "U.S. Crude Production Sets Records In July" →

Moment of Truth Approaching on Iran Sanctions

Posted on by Robert Boslego

OPEC’s market monitoring committee met on September 23rd to assess conditions just about six weeks before new U.S. Iran sanctions go into effect, targeting Iran’s oil sector. Buyers and sellers are in the process of finalizing their loading programs for November, and so this assessment is of particular importance as to the question of whether oil supplies will be adequate once those sanctions go into effect.

The market focused on the lack of public discussion of President Trump’s demand on Twitter last Thursday for OPEC to increase supplies to get prices down:

"We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!"

However, Saudi Energy Minister Khalid al-Falih was quoted as saying, "Our plan is to respond to demand. If demand [for Saudi crude] is 10.9 million b/d you can certainly take it to the bank that we will meet it. But the demand is 10.5 million b/d or 10.6 million b/d. I think October will be more than this."

Iran Sanctions
Source: AFP

In a more recent news story, it was reported that Saudi Arabia and its allies discussed adding 500,000 b/d to supply. Saudi Aramco plans to add 550,000 b/d of new capacity in the Khurais and Manifa oilfields in the fourth quarter of 2018. Continue reading "Moment of Truth Approaching on Iran Sanctions" →