Global Supply / Global Demand -- Twin Peaks -- October 13, 2018

Important enough to re-post.

From the Rigzone article linked below -- petrochemicals are becoming the largest oil demand drivers.

Link to original article here.

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Twin Peaks

Oil Demand / Oil Supply Closing In On New Records

Link here.  Rigzone staff.

Both global oil demand and supply are now close to new, historically significant peaks at 100 mb/d, and neither show signs of ceasing to grow any time soon.

“Fifteen years ago, forecasts of peak supply were all the rage, with production from non-OPEC countries supposed to have started declining by now. In fact, production has surged, led by the US shale revolution, and supported by big increases in Brazil, Canada and elsewhere,” the IEA said in a statement published on its website Friday.

“In future, a lot of potential supply could come to the market from places like Iran, Iraq, Libya, Nigeria and Venezuela, if their various challenges can be overcome,” the IEA added.

“There is no peak in sight for demand either. The drivers of demand remain very powerful, with petrochemicals being a major factor,” the IEA continued.

The IEA said it is an “extraordinary achievement” for the global oil industry to meet the needs of a 100 (MMbpd) market but announced that twin peaks for demand and supply have been reached “by straining parts of the system to the limit”.

See STEO report that follows -- sent in my reader.

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From A Reader Regarding EIA's Latest STEO Report

New STEO is out today (October 10, 2018): 

• added 914 data for JUL (10.96 reported, higher than previous estimate of 10.78 from last month STEO) 
• estimates for AUG and SEP revised up from high 10s to low 11s
• 2018 average revised slightly up (from 10.66 to 10.74).

Comment from reader: Note that the peak oilers and shale haters, just a month and a half ago were crowing about how US production was stuck and how EIA was too optimistic (when we had a couple flat months). They were saying we would be lucky to average 10.5 for the year, that it was impossible to hit an average of 10.6-10.7, and that EIA would be forced to revise estimates down soon. Instead we are well on track to hitting 10.7, no problem, and the revisions are going up, not down. 

Comment from reader: Almost a replay of what happened last year with production catching up after a flat period...but the peak oilers never learn...every time we slow for a couple months, they come out of the cracks...

From STEO:

• 2019 average estimate revised up very significantly: from 11.5 to 11.8 MM bopd.

Comments from the reader:

• My personal guess: The EIA is still estimating a little low.
• The oil companies in the Permian will "adapt and overcome" and get those Permian barrels out.
• We will exit 2018 (DEC month) at 11.5 (very doable, less than 0.1 million growth per month for rest of year).
• I think 2019 will be explosive, probably backweighted (as pipes start opening).
• We could exit the year at 13 million bopd (little higher than 0.1 million bopd/month.)
• "We" might just north of 12 million bopd for 2019 (given the big growth is towards second half of the year). 

The STEO here.   

News analysis here. 

With regard to getting those Permian bbls out: there are already reports the pipes are coming on-line faster than originally expected/forecast.