In summary, what is this analysis telling us? In this article, we will take a brief look at demand and supply trends in the global oil market and attempt to assess whether the recent sell-off in oil prices NYSE: For the Bakken to exceed its prior production peak, a total of 95 active rigs would be required, nearly double the current active rig count of OPEC production is presently around The recent rise in the US oil rig count has been a major factor dampening sentiment towards oil, with fears that US production growth will swamp global demand.
We can therefore comfortably assume that OPEC should be able to increase its production by at least 1mn bpd once the voluntary production cuts come to an end and thus take care of at least one-third of the required supply growth to the end of A rebound in Libya, near record Iraqi output and higher volumes from Nigeria and Saudi Arabia outweighed a substantial reduction in Iran and a further fall in Venezuela.
As Oil supply and demand outlook to be seen, growing incremental production by 1. Based on current estimates from various sources, including the EIA, the US oil rig count will reach by endwith US oil production expected to reach 9. The current agreed production quota is This implies a total US oil rig count of at least 1, compared to at present that will eventually be required in order for US production to close the anticipated global supply gap.
So, growing production bybpd in the Bakken and the Eagle Ford would imply the need for another 60 rigs. Nevertheless, we should highlight that even under a more favorable oil price scenario, production growth from the Permian is likely to be constrained and capped at around 3. If Venezuelan and Iranian exports do continue to fall, markets could tighten and oil prices could rise without offsetting production increases from elsewhere.
Even so, inwe are seeing signs of weaker demand in some markets: These estimates are similar to the projections presented by Raymond James below. It does not seem obvious to us. This implies that of the 1. For the Permian, it is much less at around bpd on a monthly basis. Additionally, we would also note that the only shale basin in the US which is seeing meaningful record production growth is the Permian basin, where production has now reached some 2.
This level of production will far exceed the prior production peak reached in In summary, even assuming further productivity gains, it appears quite clear that if US oil production is to grow as robustly as current market concerns suggest, the rig count will need to increase even further, possibly significantly further from current levels.
Nevertheless, non-OPEC supply was up 2. Finally, we will discuss the most recent shale basin productivity report published by the Energy Information Agency EIA and assess what this means for future US oil production trends.
Want to share your opinion on this article? However, global demand growth projections suggest that US oil production may have to grow by as much as 2mn barrels per day bpd over the next 18 months.
Although the oil rig count has grown rapidly over the past year, we still seem to be far away from levels that would point to a sustained long-term supply glut at least based on current global demand and supply trends.
Stocks have been stable in a narrow range since March. I have no business relationship with any company whose stock is mentioned in this article. This implies that global liquids production will need to grow by at least 3. In the Permian, that number would double to We know that OPEC is currently producing less than its potential capacity due to voluntary production cuts agreed to by the various members.
OPEC crude supply rose to a nine-month high of And, in terms of the existing rig count, this does not appear to be a likely scenario at present. It remains to be seen if other producers decide to increase their production. Preliminary data for August point to significant inventory builds in Japan and the US, and a fall in Europe.
These projected demand numbers contrast with current oil production of roughly It is not just a question of volume; refiners used to processing Venezuelan or Iranian crude will compete to find similar quality barrels to maintain optimal refinery operations. We are entering a very crucial period for the oil market.
As we move intoa possible risk to our forecast lies in some key emerging economies, partly due to currency depreciations versus the US dollar raising the cost of imported energy.
However, as we have seen in the past few days with attacks on NOC headquarters, the situation is fragile. I wrote this article myself, and it expresses my own opinions. Alternative supplies of lighter crude might not be ideal for this reason.
This essentially still leaves a supply gap of around 1. In Venezuela, production fell in August to 1.McKinsey Energy Insights (MEI), an energy data and analytics specialist in London, has released its latest Global Oil Supply and Demand Outlook towhich identifies five potential supply and.
MEI has identified six key supply and demand drivers that will contribute to long-term oil price recovery. On the demand side, slower growth in global GDP—%–% p.a.—coupled with decreasing oil intensity due to improved energy efficiency and alternative fuels will drive a.
The "Middle East Africa Oil and Gas Supply - Demand Outlook to - Offshore deepwater exploration key for production growth" report has been added to Research and Markets' offering. Middle East Africa oil and gas supply demand outlook report provides detailed outlook of global, regional and country wise forecasts to Forour global demand growth outlook is unchanged at mb/d.
In growth accelerates slightly to mb/d, but there are risks to the forecast from escalating trade disputes and rising prices if supply is constrained. Global oil supply rose by kb/d in July to mb/d, mb/d above a year-ago. In this article, we will take a brief look at demand and supply trends in the global oil market and attempt to assess whether the recent sell-off in oil prices (NYSE:USO) is justified.
In particular, we will focus on the supply dynamic in the US onshore oil market, given that US oil production is now increasingly the key “swing” factor in the outlook for global energy prices. Global Oil and Gas Supply - Demand Outlook to - Offshore deepwater exploration key for production growthPrice: €Download