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Thursday, June 16, 2016

OPEC Turmoil Could Turn Balanced Market Into Shortfall -- IEA -- June 16, 2016

Link here.

Data points, observations, comments from the linked article follow:
  • world oil production will nearly match consumption in 2017; will end several years of oversupply
  • to meet demand, OPEC needs to pump an extra 650,000 bopd over the year -- Bloomberg
  • to do that would require solutions to Nigeria's militant attacks; Libya's political divisions; and, Venezuela's economic crisis -- Bloomberg is optimistic on any of these
  • by end of next year (2017), OPEC would need to pump nearly 1 million bbls above last month's production level to keep the market balanced 
  • Nigeria: production at a 28-year low of 1.4 million bopd (about 500,000 bbls below full capacity)
  • Libya: at 270,000 bopd in May, just a fracked of the 1.6 million bopd it pumped under Qaddafi in 2011
  • Venezuela: at 2.3 million bopd last month, the lowest since 2009; on track to drop another 100,000 bopd
  • Iran: could provide some relief; currently around 3.7 million bopd
  • global supply: after two years of oversupply, the west has more than 3 billion bbls in storage (sounds like a lot; 3 billion bbls / 100 million bbls = 30 days) -- but that oversupply is said to be "enormous" and "dampens the prospects of a significant increase in prices"
  • OPEC: will pump 33.3 million bopd in 2017 compared to 32.6 million bopd in May, 216 -- IEA
  • but Bloomberg notes that if OPEC output falls short of IEA estimates, those stockpiles would start to shrink rapidly (yes, 3 billion bbls / 100 million bbls = 30 days)
Oilprice pretty much says the same thing. Is talk about "re-balancing" oil supply and demand in the near future similar to all that talk about "Peak Oil" some years ago? I'm not so sure. 

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