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It’s Too Early to Assume Peak Oil Demand

“I believe we may not see $100 (oil) ever again,” said Vitol’s Ian Taylor last week in London. His rationale for making such a prediction is the belief that global oil demand will peak in the medium term. “I have begun feeling that… we are coming to peak demand towards 2030,” said Taylor, the CEO of the world’s largest oil trader, as quoted by Reuters. Peak demand is the point at which the world’s oil demand stops growing for good—current global oil demand is 93 million barrels per day, with most estimates expecting that figure to grow to over 100 million barrels per day within the next five to ten years. His comments come at a very curious time, given the current oil market situation, with prices in the $40-$50 range, U.S. consumption back on the rise, emerging markets seeing rapid economic development, and petroleum still making up more […]

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U.S. crude stocks up for 7th week; imports, distillates rise

U.S. crude stocks rose last week as imports jumped, while swollen gasoline stocks decreased and distillates unexpectedly rose as refiners hiked output, data from the Energy Information Administration showed on Thursday. Crude inventories rose by 4.2 million barrels to 487 million in the last week, compared with analysts’ expectations for an increase of 1.0 million barrels. Stockpiles have now risen for seven consecutive weeks, nearing a record high above 490 million barrels touched in April. "It’s another data point highlighting the oil glut in the U.S. or the global markets for that matter," said Chris Jarvis, analyst at Caprock Risk Management in Frederick, Maryland. "With inventories approaching record levels, coupled with weak equity markets and a stronger dollar, we would not be surprised to see a retest of the $38 level set in August." The EIA data came on the heels of an OPEC report that suggested the producer […]

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U.S. shale oil output will be less resilient than gas: Kemp

U.S. natural gas production hit a new record in August, despite the deepening slump in gas prices and a fall in the number of rigs targeting gas formations. The failure of gas production to respond to lower prices and a falling rig count has left many analysts wondering if it heralds the same problem in the oil market – worsening oversupply. The number of rigs drilling for oil has plunged almost two-thirds over the last 12 months, but crude production is unchanged since October 2014 and down by less than 5 percent compared with its peak in April. Like shale gas producers, shale oil drillers have managed to raise output while cutting costs by concentrating on the best-known and most productive formations and areas. They have also standardized and accelerated the drilling process, drilled longer horizontal wells with more fracking stages, and employed more horsepower to fracture larger areas […]

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Analysis: IEA World Energy Outlook sees Radical Shifts, Despite Conservatism

The next 25 years will see a radical shift towards renewables and away from coal, a global energy centre of gravity pivoting towards India and the prospect of Africa leapfrogging dirty energy. These are some of the insights touted by the International Energy Agency (IEA) World Energy Outlook 2015 , published this week. The annual outlook, weighing in at 700 pages, is one of the most widely-read and universally respected set of energy-related forecasts in the world. Yet it’s important to remember it remains just that: a forecast , reflecting a complex set of economic and energy-cost assumptions. Carbon Brief reviews some of the conservative assumptions that lie behind the outlook’s findings. China is slowing down One of the most dramatic shifts seen in this year’s outlook is the slowdown in China, in particular for coal. Now the world’s largest emitter, China is responsible for burning half of all […]

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EIA: Alberta oil will move by rail

U.S. study of post-Keystone XL energy landscape in Canada finds rail may carry more oil across the region. Photo by Steven Frame/Shutterstock WASHINGTON, Nov. 11 (UPI) — Crude oil deliveries from Alberta, Canada, will rely on rail in the wake of the permit refusal for Keystone XL , the U.S. Energy Information Administration said. The U.S. State Department last week denied TransCanada’s permit to build the cross-border Keystone XL oil pipeline. The project was designed to carry as much as 830,000 barrels of oil per day from Canada to Nebraska. From there, it would eventually send oil through the so-called Gulf Coast Project, which TransCanada put into service in 2014, and on to refineries along the southern U.S. coast Mark Cooper , a TransCanada spokesman, said saying no to Keystone XL means more of Canada’s crude oil would be sent to the U.S. market by rail, which the company […]

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Oil glut to swamp demand until 2020

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Short-Term Energy Outlook

Market Prices and Uncertainty Report This is a regular monthly supplement to the EIA Short-Term Energy Outlook . Contact: James Preciado ( [email protected] ) Full Report Crude Oil Prices: Crude oil prices remained within the range established over the previous three months. The North Sea Brent front month futures price settled at $47.98 per barrel (b) on November 5, an increase of 29 cents/b since October 1 ( Figure 1 ). The West Texas Intermediate (WTI) front month futures price settled at $45.20/b on November 5, rising by 46 cents/b over the same time. Figure 1: Historical crude oil front month futures prices Although prices were relatively stable, large uncertainty remains in the crude oil market, as upside and downside risks to supply and demand still exist. U.S. oil-directed rig counts continue to decline, but the effect on the overall U.S. production in the past few months is unclear. […]

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U.S. Lowers 2016 Crude Output Forecast as Drillers Idle Rigs

The Energy Information Administration cut its U.S. crude production outlook for next year as declining prices are prompting shale drillers to put rigs aside. Cheaper gasoline is expected to stoke demand for the motor fuel. The agency decreased its 2016 forecast by 1 percent to 8.77 million barrels a day, according to its monthly Short-Term Energy Outlook . It boosted its estimate for this year to 9.29 million barrels a day from the 9.25 million predicted last month. America’s oil drillers have sidelined more than half the country’s rigs since October as prices have tumbled. The number of active oil rigs in the U.S. has fallen by 103 in the past 11 weeks to 572, the least in five years, according to data compiled by Baker Hughes Inc. "Total oil production from non-OPEC countries is expected to decline next year for the first time since 2008, because of lower […]

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U.S. shale oil basins to decline

Federal review expects most of the lucrative shale basins in the United States are expected to post declines in crude oil production. File photo by Gary C. Caskey/UPI WASHINGTON, Nov. 10 (UPI) — Only the Permian shale basin in the southern United States is expected to record a year-on-year increase in oil production, federal data show. The U.S. Energy Information Administration in a monthly report on drilling productivity found most of the seven inland shale basins that account for nearly all of the domestic oil production growth between 2011-14 are now in decline. Energy companies are spending less on exploration and production because lower crude oil prices translate to less capital available for investments. The trend in spending is reflected in the decline in the number of rigs deployed across North America. Oil field services company Weatherford said in its report for the third quarter it trimmed capital spending […]

Posted On : Published By : Tom Whipple