IEA Moves US Peak Oil To Mid-2030's -- November 13, 2019

Repeating their trillion-dollar mistake OPEC+ sees no need to restrict production. Bloomberg suggests:

Crude prices, trading at about $62 a barrel in London, may tumble almost 30% to $45 a barrel if the Organization of Petroleum Exporting Countries and its allies don’t announce deeper production cutbacks, according to Morgan Stanley. Citigroup Inc. and BNP Paribas SA predict a slide to the low $50s.

That would intensify the strain on group members like Venezuela, Iran and Iraq, which are already reeling from economic crises and political unrest. It would also ripple through the rest of the industry, hitting the shale boom that has transformed the U.S. into the world’s biggest oil producer.

“The prospect of oversupply looms over the market in 2020,” said Martijn Rats, global oil strategist at Morgan Stanley. “Either OPEC deepens its cuts, or prices will fall to about $45 a barrel, and force a slowdown in U.S. shale that balances the market.”

LOL: OPEC+ says it will need to step in to fill the oil demand shortfall ... in 2030.

The Permian must be absolutely huge. Remember, estimates place it larger than Saudi Arabia's monster field.

IEA woke: wow, I couldn't believe the number of stories yesterday regarding the growth of US shale and the effect it will have on global markets (read: OPEC). At first, I thought it was a one-off, the story, I posted yesterday, but late last evening, I ran into story after story about US shale. From ArgusMedia, a great example:

US shale production is likely to stay "higher for longer", reducing the share of Opec members and Russia in the global oil supply, the IEA said in this year's World Energy Outlook (WEO). "Efforts to manage conditions in the oil market could face strong headwinds," it said.

In the WEO's Stated Policies scenario, which incorporates existing measures and announced policy intentions and targets, but "does not speculate on how these might evolve", annual US production growth "slows from the breakneck pace seen in recent years". But, the US still accounts for 85pc of the increase in global oil production to 2030, and for 30pc of the increase in gas. The US will produce more oil and gas than Russia by 2025 under this scenario, the IEA said.

In this scenario, US tight crude production grows from 6mn b/d in 2018 to just under 11mn b/d in 2030. The majority of this growth comes from the Permian basin in Texas, "which by itself produces more crude than the continent of Africa soon after 2030."

And, it's not going to slow down:

"There is a material slowdown after 2025, but this does not lead to a definitive peak in oil use," the WEO said. Demand increases to 105.4mn b/d in 2030, then by 100,000 b/d each year on average during that decade to 106.4mn b/d in 2040.

From S&P Global Platts: IEA boosts US shale estimate "warning" for OPEC. Peak oil? What peak oil? Huge story:

• US tight oil output peak moves to mid-2030s
• OPEC's market share to drop to 36% in 2025
• income squeeze seen for traditional producers

IEA sees US shale squeezing OPEC influence: from The WSJ --

Unceasing U.S. shale-oil production will reshape global energy markets in the years to come, bolstering the country’s influence over nations in the Organization of the Petroleum Exporting Countries, the International Energy Agency said Wednesday.

In its annual World Energy Outlook report, the IEA said that even as annual U.S. production growth slows from the pace seen in recent years, its forecast scenario for policies already announced mean that the country will account for 85% of the increase in global oil production to 2030.

“U.S. growth will limit the ability of traditional exporters to manage exports,” said Fatih Birol, the IEA’s executive director. “Countries whose economies are exclusively reliant on oil-and-gas reserves are facing serious challenges.”

My hunch is that Warren, Biden, Sanders, et al, want to stop this. 
 
Perfect timing: along with the RBN Energy blog today (see below), oilprice has this headline: "Canada's oil giants are fed up with pipeline delays." Unfortunately there's not much in the story; mostly clickbait.

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Back to the Bakken

Active rigs:

$56.40	11/13/2019	11/13/2018	11/13/2017	11/13/2016	11/13/2015
Active Rigs	55	65	54	38	64

Wells coming off the confidential list today -- Wednesday, November 13, 2019: 46 for the month; 141 for the quarter:

• 36364, conf, Newfield, Schneiderman 150-99-29-32-2HLW,
• 36033, SI/NC, RimRock, Skunk Creek 12-10-11-16HA, 
• 34881, SI/NC, Hess, AN-Norby-152-94-0409H-4, 
• 34880, SI/NC, Hess, AN-Norby-152-94-0409H-5, 
• 34836, conf, Enerplus Nyx, 149-93-33D-28H, 
• 34835, conf, Enerplus, Eos 149-93-33D-28H-TF, see also, #23226, #23227, #26839.
• 30991, SI/NC, BR, Gudcadia 8-1-26TFH-ULW, 

RBN Energy: the outlook for gas supply, demand and pipeline egress from western Canada.

Limited natural gas export options and persistently weak gas prices are not new phenomena in Western Canada. But market conditions in the past couple of years have become particularly untenable. Western Canadian Sedimentary Basin (WCSB) gas supply has ratcheted higher and shows signs of further growth, even as its share of export markets has been shrinking with the rise of U.S. shale gas. In-region oversupply conditions have worsened, creating transportation constraints further and further upstream in the WCSB, and prices at the regional benchmark AECO hub have seen historical lows as a result. To deal with this, and perhaps provide a long-term solution to weak natural gas prices, pipeline egress will have to expand again after a decade of decline and stagnation. New takeaway capacity is now starting to be developed. The question is, will it be enough?

Today, we discuss the expanding gas pipeline options out of Western Canada, including when, where and how much takeaway capacity will be developed.

Canadian natural gas prices have been under siege from several angles in the past few years. First, the growth in U.S. gas supplies has been eroding Canada’s market share of its traditional export markets in the U.S. So much so, that Canada’s gas exports to the U.S. Northeast have effectively been displaced by Marcellus/Utica supplies, and those to the Midwest are being challenged by the expanding pipeline footprint out of the Marcellus/Utica as well. Canadian gas exports to the U.S. West appear to be safe for now, but they too could be coming under greater threat in the next few years as U.S. gas supplies continue rising. The end result of this growing gas-on-gas competition downstream has been deepening discounts for Canadian gas prices as measured by the AECO price benchmark.