World Oil Supply-Demand Balance in 2017 Depends on Limited OPEC Production Increase

Robert Boslego - INO.com Contributor - Energies


The Energy Information Administration (EIA) recently released its September Short-Term Energy Outlook (STEO) and its projects that world supply and demand will finally balance by late 2017. However, that depends on OPEC production rising a very small amount.

Base Case Scenario

Specifically, the EIA reported that OPEC crude production averaged 32.7 million barrels per day (mmbd) in August, and it projects OPEC production to average 32.95 mmbd in 2017. Under that scenario, world supply meets demand of 97.8 million barrels per day, and total inventories end 2017 at 3.062 billion barrels, about 350 million barrels higher than normal.

OECD Commercial Oil Inventory

The 2017 demand figure represents a gain of 1.5% from estimated demand in 2016 of 95.88 mmbd, which is a gain of 1.6% over 2015. This assumes a healthy macroeconomic environment. For example, the EIA is projecting that US GDP gains 2.6% in 2017, much better than the 1.5% GDP gain EIA assumes in 2016. Continue reading "World Oil Supply-Demand Balance in 2017 Depends on Limited OPEC Production Increase"

5 Under-Appreciated Facts About Oil… Plus One Counter-Point

Adam Feik - INO.com Contributor - Energies


Recent data on oil prices and energy equities is painting a picture few seem to appreciate. Here are 5 under-appreciated nuggets of information that generally seem to favor a rebound in oil prices and oil companies’ stocks. At the end, I offer one significant counterpoint.

Fact #1: Growing demand: Media outlets seem to continue wondering whether global demand for oil has increased with today’s lower prices. The answer, of course, is a definite yes.

I listened a couple weeks ago to a presentation by a portfolio manager of the Guinness Atkinson Global Energy Fund (GAGEX), Jonathan Waghorn (who co-manages the fund along with Tim Guinness and Will Riley). I’ll reference information and charts from Mr. Waghorn’s presentation throughout this article. Continue reading "5 Under-Appreciated Facts About Oil… Plus One Counter-Point"