World Oil Supply And Price Outlook, March 2019

The Energy Information Administration released its Short-Term Energy Outlook for March, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated a 21-million barrel decline for February to 2.837 billion, 9 million barrels lower than a year ago.

However, throughout 2019, OECD inventories are expected to rise rather quickly through November. At year-end, EIA projects stocks to be 2.918 billion barrels, 64 billion more than at the end of 2018.

For 2020, EIA projects that stocks will build another 82 billion barrels to end the year at 3.000 billion. That would push stocks into glut territory.

oecd oil inventories

Oil Price Implications

I updated my linear regression between OECD oil inventories and WTI crude oil prices for the period 2010 through 2018. 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 80 percent. Continue reading "World Oil Supply And Price Outlook, March 2019"

World Oil Supply, Demand And Price Outlook, February 2019

The Energy Information Administration released its Short-Term Energy Outlook for February, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated a 12 barrel gain for January to 2.875 billion, 10 million barrels higher than a year ago.

Throughout 2019, OECD inventories are generally expected to rise after June. At year-end, EIA projects ending the year with 2.957 million barrels, 94 million more than at the end of 2018.
For 2020, EIA projects that stocks will build another 105 million barrels to end the year at 3.062 billion. That would push stocks into glut territory.

Energy Outlook

Oil Price Implications

I updated my linear regression between OECD oil inventories and WTI crude oil prices for the period 2010 through 2018. 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 80 percent. Continue reading "World Oil Supply, Demand And Price Outlook, February 2019"

World Oil Supply, Demand And Price Outlook, January 2019

The Energy Information Administration released its Short-Term Energy Outlook for January, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated an 8 barrel gain for December to 2.883 billion, 39 million barrels higher than a year ago.

Throughout 2019, OECD inventories are generally expected to rise. At year-end, EIA projects ending the year with 2.951 million barrels, 68 million more than at the end of 2018.

EIA also extended its outlook through 2020 for the first time. It projects that stocks will build another 75 million barrels to end the year at 3.025 billion. That would push stocks into glut territory.

Short-Term Energy Outlook

Oil Price Implications

I performed a simple linear regression between OECD oil inventories and WTI crude oil prices for the period 2008 through 2017. 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, Demand And Price Outlook, January 2019"

World Oil Supply, Demand And Price Outlook, December 2018

The Energy Information Administration released its Short-Term Energy Outlook for December, and it shows that OECD oil inventories likely bottomed in March at 2.807 billion barrels. It estimated a 10-million barrel gain for November to 2.902 billion. Though it forecasts that stocks will drop in December to 2.894 billion, that is 50 million barrels higher than a year ago.

Throughout 2019, OECD inventories are generally expected to rise, reaching 3.010 billion barrels in November. Its projections end the year with 88 million barrels more than at the end of 2018, glut territory.

oil

OPEC pledged to cut its production by 800,000 b/d from the October level for the first six months of 2019. EIA estimates OPEC production at 32.9 million barrels per day (mmbd), including Qatar, which will no longer be a member of OPEC in January. EIA’s assume OPEC production for 2019 is 31.8 mmbd, and so that represents a larger 1.1 mmbd drop. Continue reading "World Oil Supply, Demand And Price Outlook, December 2018"