Global oil supply 'will match demand until 2020'

Global oil supply 'will match demand until 2020'

Global oil supply 'will match demand until 2020'

But the rise in the latter inevitably threatens the former. Smith points out that various trading houses were selling crude from the storage hub after the market had flipped into backwardation (when near-term prices are higher than those further into the future), dis-incentivizing crude storage - be it onshore or offshore (a.k.a. floating storage). And a lot more shale oil is coming, both in 2018 and beyond, executives and traders said. Corporate efficiency standards for USA cars help constrain us domestic oil use, freeing up USA refined products and crude oil for export and enhancing the role of USA energy production to constrain OPEC and Russian market power.

Opec has been dealing with U.S. shale for nearly a decade now. For the first few years, it downplayed the production as a mere blip. The massive cuts to upstream investment since the collapse of oil prices in 2014 will begin to cause supply problems at the beginning of the next decade. OPEC believes Venezuela will be able to rebuild its production, UAE oil minister Suhail Mohamed Al Mazrouei said. The modest increase will be concentrated in the USA shale fields, where technological advances have driven down the cost of production.

We jointly agreed then [on last year's meeting with U.S. shale producers] that we should continue with this dialogue. But despite dinner invitations and behind-closed-doors conversations, shale continues to increase output and grab market share.

The IEA expects global oil demand to increase by 6.9m bpd by 2023 to 104.7m bpd, with China driving demand growth. Unlike OPEC countries, shale firms do not have political goals, and their main objective is profit.

OPEC says it wants to encourage moderation by shale companies as well as its own members. But in the age of USA oil abundance, OPEC's Gulf members are questioning whether this approach continues to make sense. As oil prices recovered, so did drilling. "Everyone has benefited" from the deal, and newfound optimism has spread through the industry, said OPEC Secretary General Mohammed Barkindo during the CERAWeek conference by IHS Markit in Houston. The Nigerian oil minister said Monday that OPEC is pressuring USA oil companies to stabilize the global market. Meanwhile, supply grows by about 6.4 million barrels a day, with a whopping 3.7 million barrels a day coming from the US, almost 60% of the total global supply increase.

This year's CERAWeek conference continues outreach between the Organization of the Petroleum Exporting Countries and shale producers.

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Others inside Opec are sounding exasperated as the resurgence in shale output could force the cartel to prolong its output cuts beyond the end of 2018. So, they expect the United States to outperform Russian Federation and become number one later this year. "However, I don't believe that this strength will be long-lived with rising US production and a strengthening dollar", said Phillip Streible, senior market strategist at RJO Futures in Chicago. Oil industry leaders applauded the proposal. "Without Opec there'd be chaos in the market". This fact is not lost on OPEC producers.

The shale boom is just booming. However, it will inevitably drive up costs for the nation's oil and gas producers. "Now hiring" signs abound in Midland as the state sees its unemployment rate dip back below the national average.

USA crude oil and stock index figures shifted lower Wednesday amid global market fears on a trade war, the resignation of President Donald Trump's chief economic adviser and rising inventories.

The Asia-Pacific region is seen accounting for roughly 60% of global oil product demand growth over the next five years.

The report reads that over the period of September through November, American shale oil companies increased their production by 846K b/d.

The strongest growth is expected to come from the Permian Basin, a vast oil and gas pool that lies under parts of Texas and New Mexico. As you recall, a few years ago, OPEC members overflooded the world with crude oil to force the USA shale producers out of business.

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