World Oil Supply And Price Outlook, August 2019

The Energy Information Administration released its Short-Term Energy Outlook for August, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.805 billion barrels. It estimated stocks dropped 16 million barrels in July to 2.887 billion, 61 million barrels higher than a year ago.

However, for the balance of 2019, OECD inventories are projected to rise, on balance. The third quarter seasonal stock draw is over. At year-end, EIA projects 2019 to be at 2.901 million barrels, 40 million more than at the end of 2018. For 2020, EIA projects that stocks will build 58 million barrels to end the year at 2.959 billion.

Oil

The EIA has revised its estimates for future OPEC production down significantly, given the sanctions on both Iran and Venezuela. For much of the balance of 2019 and 2020, it expects OPEC production to remain under 30 million barrels per day. July was reported at 29.61 mmbd. Continue reading "World Oil Supply And Price Outlook, August 2019"

World Oil Supply And Price Outlook, July 2019

The Energy Information Administration released its Short-Term Energy Outlook for July, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.805 billion barrels. It estimated stocks dipped by 4 million barrels in June 2019 to 2.902 billion, 97 million barrels higher than a year ago.

However, throughout 2019, OECD inventories are no longer expected to rise any further, on balance. At year-end, EIA projects 2019 to be with 2.899 million barrels, 37 million more than at the end of 2018. For 2020, EIA projects that stocks will build 35 million barrels to end the year at 2.934 billion.

oecd oil inventories

The EIA has revised its estimates for future OPEC production down significantly, given the sanctions on both Iran and Venezuela. For much of the balance of 2019 and 2020, it expects OPEC production to remain under 30 million barrels per day. June was reported at 29.8 mmbd.

OPEC has revised its call (demand) for OPEC oil. For 2020, the average is 29.2 mmbd. Therefore, OPEC must cut supply by another 550,000 b/d from June next year just to balance stocks. Continue reading "World Oil Supply And Price Outlook, July 2019"

World Oil Supply And Price Outlook, June 2019

The Energy Information Administration released its Short-Term Energy Outlook for June, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.804 billion barrels. It estimated stocks rose by 38 million barrels in May to 2.902 billion, 84 million barrels higher than a year ago.

However, throughout 2019, OECD inventories are no longer expected to rise any further. At year-end, EIA projects 2019 to be with 2.871 million barrels, 10 million more than at the end of 2018. For 2020, EIA projects that stocks will build 49 million barrels to end the year at 2.920 billion.

oecd oil inventories

The EIA has revised its estimates for future OPEC production down significantly, given the sanctions on both Iran and Venezuela. For much of the balance of 2019 and 2020, it expects OPEC production to remain under 30 million barrels per day. U.S. shale is expected to capture market share from OPEC. Continue reading "World Oil Supply And Price Outlook, June 2019"

World Oil Supply And Price Outlook, May 2019

The Energy Information Administration released its Short-Term Energy Outlook for May, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated that stocks rose by 20 million barrels in April to 2.860 billion, 51 million barrels higher than a year ago.

Throughout the balance of 2019, OECD inventories are expected to rise modestly. At year-end, EIA projects stocks at 2.870 million barrels, 11 million more than at the end of 2018.

For 2020, EIA projects that stocks will build another 35 million barrels to end the year at 2.905 billion. The non-extension of waivers to Iran’s sanctions implies lower OPEC output for the period, and this factor has lowered the EIA’s stock forecast materially.

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, May 2019"

World Oil Supply And Price Outlook, April 2019

The Energy Information Administration released its Short-Term Energy Outlook for April, and it shows that OECD oil inventories likely bottomed last June at 2.806 billion barrels. It estimated stocks fell by 18 million barrels In March to 2.829 billion, 23 million barrels higher than a year ago.

However, throughout 2019, OECD inventories are expected to rise rather quickly through November. At year-end, EIA projects 2091 to be with 2.915 million barrels, 53 million more than at the end of 2018.

For 2020, EIA projects that stocks will build another 70 million barrels to end the year at 2.985 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, April 2019"