Tag: OECD oil inventories

The Energy Information Administration released its Short-Term Energy Outlook for April, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.802 billion barrels. It estimated stocks built by 109 million barrels in March to end at 3.059 billion, 201 million barrels higher than a year ago.

For 2020, OECD inventories are projected to build by 468 million barrels to 3.351 billion. For 2021 it forecasts that stocks will draw by 207 million barrels to end the year at 3.144 billion.

The EIA forecast was made prior to the OPEC+ decision to cut production and exports. According to OPEC’s press release: Continue reading "World Oil Supply And Price Outlook, April 2020" →

The Energy Information Administration released its Short-Term Energy Outlook for March, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.802 billion barrels. It estimated stocks dipped by 5 million barrels in February to end at 2.914 billion, 44 million barrels higher than a year ago.

For 2020, OECD inventories are projected to build by 137 million barrels to 3.031 billion. For 2021 it forecasts that stocks will draw by 48 million barrels to end the year at 2.983 billion.

The EIA estimated that OPEC production dropped by 72,000 b/d in February to 28.49 million barrels per day. For 2020, it estimates that OPEC production will average about 29.08 million, about 720,000 b/d lower than in 2019. For 2021, it estimates OPEC production average 2.941 million. The EIA did not increase its estimates for OPEC despite the announcements by Saudi Arabia that it is pushing its production up to 12 million barrels per day and the UAE is increasing its production by 1 million barrels per day.

Oil Price Implications

I updated my linear regression between OECD oil inventories and WTI crude oil prices for the period 2010 through 2019. As expected, there are periods where the price deviates greatly from the regression model. But overall, the model provides a reasonably high r-square result of 79 percent. Continue reading "World Oil Supply And Price Outlook, March 2020" →

Citi is the latest to revise its estimates of the demand destruction from COVID-19. It said that it now believes inventories of crude oil could grow to 2 million barrels per day in February alone, which would put “even more sustained pressure on prices.” A week ago, the firm’s thought the potential build would be over one million barrels per day for the quarter.

Numerous sources have estimated China’s demand for crude had dropped between two and three million barrels per day since petroleum product consumption had dropped, and the profitability of running refineries had plummeted. But Goldman Sachs (GS) subsequently revised its estimate last week, that they now expect “a cumulative global stock build of 180 million barrels in 1H20, four times its pre-virus forecast.”

The Goldman forecast is based in part on an estimated hit in China’s crude oil demand of 4 million barrels per day. Goldman assumes that OPEC+ will deepen its cuts in 2Q by about 500,000 b/d.

OPEC’s Joint Technical Committee (“JTC”) met from February 4 to 6th and recommended “a further adjustment in production until the end of the second quarter of 2020” and “extending the current production adjustments until the end of 2020.” The cut would be an additional 600,000 b/d on top of the cuts announced in December.

But Russian Energy Minister Alexander Novak told reporters: Continue reading "$50 Crude Oil Not Likely To Hold" →