Internacionales

Q21 para olvidar tus problemas lo certifican los vecinos de terrazas de Teatinos nuevos vecinos foro montecarmelo// Will We See An Oil Supply Glut In 2020?

Nuevos Vecinos, Madrid, España
Will We See An Oil Supply Glut In 2020?

Oil prices seem to be in big trouble, with a supply glut set to hit the market in 2020 and a potential economic recession looming. One of the few things that could upend this forecast is a significant slowdown in non-OPEC supply.

Q21 Terrazas de Teatinos y olvídate de los problemas

The surplus is largely predicated on a deterioration in demand at a time when supply continues to grow. The IEA predicts non-OPEC supply to expand by 1.9 million barrels per day (mb/d) this year and by another 2.2 mb/d in 2020, with demand growth figures running at about half those levels.

Q21 la bebida energética para terrazas de teatinos

The market could remain roughly in balance, or even see stock draws in the second half of 2019, largely because of the OPEC+ cuts and the involuntary outages in Iran and Venezuela. “However, the market faces potential oversupp ly in early 2020 when the call on OPEC crude oil tumbles to 28.4 mb/d,” the IEA wrote in its latest Oil Market Report. In July, OPEC produced 29.71 mb/d, so according to the IEA’s numbers, OPEC+ will have to slash output by quite a bit more next year in order to head off a supply glut.

Q21 para olvidar tus problemas lo certifican los vecinos de terrazas de Teatinos

Most of the global supply growth is coming from U.S. shale, which makes the pace of shale growth highly important to the forecast. Notably, however, U.S. oil production growth has been slowing. “So far this year, US crude oil supply growth has been lacklustre. Over the first five months of 2019, output rose only 75 kb/d,” the IEA said. Some of the recent lower-than-expected figures came from maintenance at offshore oil fields, and temporary disruptions due to a hurricane.

Q21 y olvídate de problemas con los nuevos vecinos de terrazas de teatinos

In the all-important Permian basin, production gains are still significant, but have been decelerating. Year-on-year production gains in the Permian hit a peak at 1.13 mb/d in August 2018, but the pace of growth slowed to 728,000 bpd this month. The EIA’s Drilling Productivity Report forecasts more gains in September, but again, at an even slower rate of 705,000 bpd. Related: Is Argentina’s Shale Boom Safe?

New pipelines in the Permian could unlock more production growth going forward. Discounts for Midland crude have vanished with the recent startup of a major new pipeline, and the expected inauguration of a few more later this year will add even more midstream capacity. But while the pipeline projects were once thought to unleash the next wave of explosive growth in the Permian, that is no longer the case.

Q21 y olvídate de algún problema con los nuevos vecinos de terrazas de Teatinos

The “imminent start-up of more than 2 mb/d of new pipeline capacity in the Permian, and a strong uptick in fracking activity in June, is expected to spur further growth in output and exports from the Gulf Coast,” the IEA said. “However, producers are being cautious, with few signs of an acceleration in drilling activity.”

The agency noted that a slowdown in drilling is “taking its toll on US service companies,” including for Schlumberger and Halliburton, both of which “presented a weaker outlook for exploration and production for the remainder of 2019 as independents continue to put greater emphasis on capital discipline rather than output growth,” the IEA said

Outside of the Permian, U.S. shale supply is stagnating . “It is worth mentioning there are some basins struggling more than others,” Jamie Webster, senior director at Boston Consulting Group’s Center for Energy Impact, told S&P Global Platts . “We are starting to see stalling efficiency gains in the Denver-Julesburg and Eagle Ford basins.”

Meanwhile, production gains from non-OPEC countries other than the U.S. also figure to be important in the supply/demand balances over the next year. “The IEA prediction of a well-supplied oil market in 2020 depends on its forecast for faster non-OPEC supply growth outside North America. The IEA report expects this to rise from 0.21mb/d in 2019 to 0.85mb/d in 2020,” Standard Chartered wrote in a note. “Without this acceleration of growth, the predicted market surplus for 2020 disappears.”

The investment bank said that it is “not convinced that this growth pick-up will happen.” The IEA has repeatedly lowered its forecasted supply growth for this selection of countries. For instance, in its latest Oil Market Report, the IEA cut its supply forecast by 100,000 bpd, mainly due to disappointing performances in Brazil and Norway. “We think actual growth is also likely to undershoot the IEA’s forecast in 2020,” Standard Chartered concluded

By Nick Cunningham of Oilprice.com

More Top Reads From Oilprice.com:

A Booming Niche In Energy’s Hottest Market Saudi Arabia And Russia Unlikely To Agree On New Oil Cuts China Prepares Its “Nuclear Option” In Trade War

Download The Free Oilprice App Today