MARKETS: IEA sees global oil glut growing at faster rate than demand

(EnergyAsia, May 29 2015, Friday) — Crude prices have survived months of heavy selling pressure despite evidence of a growing glut since the start of the year. As Organization of Petroleum Exporting Countries (OPEC) ministers prepare to meet in Vienna on June 5, they will note with some satisfaction that prices have recovered by more than a third since hitting bottom in January, with no signs that crude is headed towards the US$20/barrel levels predicted by Goldman Sachs.

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MALAYSIA: Petronas struggles to justify Canadian LNG project despite improved offer from BC government

(EnergyAsia, May 29 2015, Friday) — In signing a much-awaited memorandum of understanding (MOU) and two major agreements with Pacific NorthWest LNG (PNW) on May 20, the British Columbia government made good its promised support for the company’s proposed project to produce liquefied natural gas (LNG) in northern BC for export to Asia.

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CHINA: Saudi Aramco’s 10th global R&D centre opens in Beijing

(EnergyAsia, May 26 2015, Tuesday) — Saudi Arabia’s state-owned energy firm Aramco has opened an energy research centre in Beijing to help drive its innovation and technology development programme in China. Saudi petroleum minister Ali I. Al-Naimi officially opened the 4,400-square metre Beijing Research Center (BRC), the 10th in the company’s global research and development…

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MARKETS: Crude prices holding onto recent gains, in neutral mode on reports of oversupply and growing MidEast conflicts

(EnergyAsia, May 25 2015, Monday) — Crude prices are holding onto recent gains as the market is divided between reports of the growing global oil surplus and escalation in Middle East violence with the Islamic State (ISIS) expanding its territorial control and launching a first attack inside Saudi Arabia.

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MARKETS: EIA raised forecasts for global oil supply and demand for 2015 and 2016

(EnergyAsia, May 20 2015, Wednesday) — The global oil glut is about to worsen, according to the US Energy Information Administration (EIA) which has raised its forecast for global oil supply over the next two years to widen the gap over demand.

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AUSTRALIA: Accenture says LNG industry faces barriers to delivering A$55 billion worth of benefits

(EnergyAsia, May 18 2015, Monday) — Having done the hard part of attracting A$250 billion worth of liquefied natural gas (LNG) investments, Australia may yet miss out on A$55 billion worth of benefits when the new plants start up over the next few years, said consulting firm Accenture. (US$1=A$1.3). In a new report, the consulting…

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ASIA: Region to contribute to global shutdown of up to two million b/d of refining capacity, says US consulting firm

(EnergyAsia, May 11 2015, Monday) — Asia, Russia and Europe will account for the bulk of the global shutdown of as much as two million b/d in oil refining capacity over the next 18 months, said a US-based consulting firm.

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AUSTRALIA: Worries abound despite record high gas and LNG production, surging crude supply

(EnergyAsia, May 4 2015, Monday) — Australia’s upstream sector is worried even though it appears to be thriving after producing record volumes of natural gas and liquefied natural gas (LNG) last year, and boosting crude and condensate output by more than 18%.

The sector’s outlook has worsened following the collapse of global oil and gas prices since last June, leading to the write-off of more than A$8 billion worth of assets and a fall in the country’s natural gas reserves, said consultant EnergyQuest. (US$1=A$1.3).

“Australia’s gas reserves replacement – a comparison of how much is produced against how much is found – proved disappointing over 2014,” said the Australian firm’s CEO Graeme Bethune.

“Reductions in the Gunnedah Basin (New South Wales), Cooper Basin (South Australia and Qeensland) and John Brookes (Western Australia) contributed to the decline in proved and probable (2P) gas reserves exceeding production.”

Even during the good times, the industry struggled against budget overshoots on huge multi-billion-dollar projects, severe labour shortages and environmental opposition. Many of Australia’s expensively assembled LNG projects will start up over the next few years, thanks to early investment decisions made before the start of the industry’s boom.

But, now instead of rejoicing, the developers are likely to face tough bargaining from Asian customers who sense an impending firesale in a glutted LNG market in the second half of the decade.

In February, ratings agency Fitch said the credit standings of France’s Total, UK’s BG Group, which is being acquired by Shell, and Australia’s Woodside Petroleum are coming under pressure from their costly exposure to their Australian LNG ventures. Having already borne the brunt of high development cost, the companies now face the prospects of losses from selling into LNG a depressed market.

Linked to crude oil, Asia’s LNG prices have fallen from a range of US$15 to US$20 per million BTU between 2011 and 2014 to less than US$8 today.

Fitch said Australia’s new LNG plants starting up from now to 2017 need Asian LNG prices to hold between US$11 and US$13 to break even.

Dr Bethune said the slump in the oil price along with the slump in demand have cast “widespread uncertainty” over the industry.

“China was seen as the big opportunity for LNG, a bottomless pit of gas demand to reduce pollution. However, the iron laws of economics apply in China as they do everywhere else and higher Chinese gas prices are reducing growth in demand,” he said.

On a more positive note, Australia boosted oil production by 18.1% to 84.3 million barrels. It also raised natural gas production by two percent to a record 1,134 petajoules (PJ) and LNG supply to 24.5 million tonnes last year.

Dr Bethune said Australian oil production has been boosted by contributions from the Vincent, Montara, Balnaves and Pyrenees oil fields in Western Australia and Bass Strait’s Turrum field in Victoria.

The industry invested a total of A$4.2 billion in exploration and A$57 billion in development projects last year.

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MARKETS: WTI poised to top US$60 for the first time since December as OPEC raised global oil demand forecast again

(EnergyAsia, May 1 2015, Friday) — Crude prices are near five-month highs as sentiments continue to favour further upside in the near term. US WTI is poised to top US$60 a barrel for the first time since December while Brent is just over US$3 short of breaking the US$70 mark.


The world’s three leading energy agencies have set the tone for this year’s trade by steadily raising their monthly forecasts for global oil demand and chipping away at supply outlook for this and next year.

The Organisation of Petroleum Exporting Countries (OPEC), the International Energy Agency (IEA) and US Energy Information Administration (EIA) have been consistently raising their consumption forecasts to record highs with each passing month.

In its April report, OPEC said it expects global demand to grow by 1.28% this year to 92.45 million b/d, an upgrade from its forecasts of 92.36 million b/d and 92.32 million b/d the previous two months.

OPEC, generally the least bullish among the three agencies in forecasting oil demand, has left almost unchanged its expectation for non-OPEC production at 57.17 million b/d for 2015.

It is also holding onto its earlier calls for the world economy to grow by 3.4% this year, up slightly from 2014’s 3.3%.

Setting the stage for oil prices to stabilise in recent months, US shale-based and Canadian oilsands producers, the main drivers of global supply growth in recent years, have been forced to drastically cut back operations since oil prices started collapsing last June.

Given the continuing strength of global demand and economic growth, oil prices appear to have seen the worst of last year’s sell-off as more analysts emerge to challenge the theme that the supply overhang could push crude down to the US$20s.

“US tight oil and Canadian oil sands output are expected to see lower growth following the recent strong declines in rig counts,” said OPEC.

The approach of driving season in North America will add another layer of support to strong global demand for gasoline.

“Worldwide gasoline demand has been soaring in recent months,” said OPEC, noting that motorists in the developed economies have been taking advantage of lower pump prices.

“In the first quarter, gasoline demand in the US showed a sharp year-on-year increase of more than 250,000 b/d. This came despite the dampening effect that cold weather typically has on gasoline demand. The improvement was supported by a rise of almost 5% in vehicle miles travelled in January, encouraged by lower retail gasoline prices.”

Gasoline is also finding favour in Asia’s booming economies, which now boast the world’s fastest growing major markets for automobiles.

According to OPEC, China, India, Vietnam and Pakistan are seeing strong demand growth as the small but expanding middle class is adopting the American love for cars despite the removal of subsidies and implementation of new taxes on vehicle ownership and use.

Middle distillates demand has also been rising sharply, particularly again in China and India, said OPEC.

In the Atlantic Basin, new regulations have come into force establishing maritime Environment Control Areas (ECAs) that have led to marine gasoil replacing residual fuel oil as a shipping fuel.

 

 

April 2015

Table 1. World oil demand, million b/d

2013   2014    2015    2015/14 %

Americas                   24.09 24.17   24.39   0.91

Europe                       13.70 13.51   13.45   -0.44

OECD Asia                   8.32   8.14    8.01   -1.60

Total OECD                 46.10   45.82   45.85   0.07

 

Other Asia                 11.06   11.27 11.53   2.30

China                          10.07   10.46   10.77   2.96

Latin America                        6.50  6.69    6.89   2.99

Middle East               7.81    8.06    8.30   2.98

Africa                           3.67    3.78    3.87   2.38

FSU                              4.49    4.54    4.58   0.88

Other Europe                         0.64    0.65    0.67   3.08

Total world                 90.33   91.28   92.45   1.28

Previous estimate   90.25   91.20   92.36   1.27

 

March 2015

Table 1. World oil demand, million b/d

2013   2014    2015    2015/14 %

Americas                   24.09 24.19   24.39   0.83

Europe                       13.64 13.45   13.36   -0.67

OECD Asia                   8.33   8.14    8.02   -1.47

Total OECD                 46.06   45.78   45.77   -0.02

 

Other Asia                 11.06   11.28 11.53   2.22

China                          10.07   10.46   10.77   2.96

Latin America                        6.50  6.69    6.89   2.99

Middle East               7.81    8.06    8.34   3.47

Africa                           3.63    3.74    3.83   2.41

FSU                              4.49    4.54    4.58   0.88

Other Europe                         0.64    0.65    0.66   1.54

Total world                 90.25   91.20   92.36   1.27

Previous estimate   90.20   91.15   92.32   1.28

 

 

February 2015

Table 1. World oil demand, million b/d

2013   2014    2015    2015/14 %

Americas                   24.08 24.18   24.39   0.87

Europe                       13.61 13.40   13.31   -0.67

OECD Asia                   8.32   8.14    8.02   -1.47

Total OECD                 46.01   45.72   45.72   0

 

Other Asia                 11.06   11.27 11.52   2.22

China                          10.07   10.46   10.77   2.96

Latin America                        6.50  6.70    6.90   2.99

Middle East               7.81   8.06    8.34   3.47

Africa                           3.63    3.74    3.83   2.41

FSU                              4.49    4.54    4.58   0.88

Other Europe                         0.64    0.65    0.66   1.54

Total world                 90.20   91.15   92.32   1.28

Previous estimate   90.20   91.13   92.26   1.24

 

 

January 2015

Table 1. World oil demand, million b/d

2013   2014    2015    2015/14 %

Americas                   24.08 24.18   24.37   0.79

Europe                       13.61 13.40   13.31   -0.67

OECD Asia                   8.32   8.14    8.02   -1.47

Total OECD                 46.01   45.72   45.70   -0.07

 

Other Asia                 11.06   11.28 11.53   2.22

China                          10.07   10.45   10.75   2.87

Latin America                        6.50  6.71    6.91   2.98

Middle East               7.81    8.07    8.35   3.47

Africa                           3.63    3.73    3.82   2.41

FSU                              4.49    4.54    4.58   0.88

Other Europe                         0.64    0.65    0.66   1.54

Total world                 90.20   91.15   92.30   1.26

Previous estimate   90.20   91.13   92.26   1.24

 

December 2014

Table 1. World oil demand, million b/d

2013   2014    2015    2015/14 %

Americas                   24.08 24.15   24.31   0.66

Europe                       13.61 13.39   13.30   -0.67

OECD Asia                   8.32   8.16    8.04   -1.47

Total OECD                 46.01   45.71   45.64   -1.53

 

Other Asia                 11.06   11.28 11.52   2.13

China                          10.07   10.42   10.73   2.98

Latin America                        6.50  6.78    6.93   2.21

Middle East               7.81    8.09    8.38   3.58

Africa                           3.63    3.72    3.81   2.42

FSU                              4.49    4.55    4.60   1.10

Other Europe                         0.64    0.65    0.66   1.54

Total world                 90.20   91.13   92.26   1.24

Previous estimate   90.14   91.19   92.38   1.31

 

 

April 2015

Table 2. World economic growth: OPEC’s forecast

World OECD   US       Japan Eurozone       China

2014                3.3       1.8       2.4       -0.1      0.9                   7.4

2015                3.4       2.2       2.9       0.8       1.3                   7.0

 

 

March 2015

Table 2. World economic growth: OPEC’s forecast

World OECD   US       Japan Eurozone       China

2014                3.3       1.8       2.4       0.0       0.9                   7.4

2015                3.4       2.2       2.9       1.2       1.2                   7.0

 

 

February 2015

Table 2. World economic growth: OPEC’s forecast

World OECD   US       Japan Eurozone       China

2014                3.2       1.8       2.4       0.2       0.9                   7.4

2015                3.4       2.2       2.9       1.2       1.2                   7.0

 

January 2015

Table 2. World economic growth: OPEC’s forecast

World OECD   US       Japan Eurozone       China

2014                3.2       1.8       2.4       0.2       0.9                   7.4

2015                3.6       2.2       2.9       1.2       1.2                   7.2

 

December 2014

Table 2. World economic growth: OPEC’s forecast

World OECD   US       Japan Eurozone       China

2014                3.2       1.8       2.2       0.4       0.8                   7.4

2015                3.6       2.1       2.6       1.2       1.1                   7.2

 

 

 

April 2015

OPEC’s forecasts for non-OPEC oil supply in 2015, million b/d

2013    2014    %         2015    %

Latest estimate        54.32   56.49   3.99     57.17   1.20

Previous estimate   54.29   56.33   3.76     57.16   1.47

 

 

March 2015

OPEC’s forecasts for non-OPEC oil supply in 2015, million b/d

2013    2014    %         2015    %

Latest estimate        54.29   56.33   3.76     57.16   1.47

Previous estimate   54.24   56.23   3.67     57.09   1.53

 

February 2015

OPEC’s forecasts for non-OPEC oil supply in 2015, million b/d

2013    2014    %         2015    %

Latest estimate        54.24   56.23   3.67     57.09   1.53

Previous estimate   54.24   56.22   3.65     57.49   2.26

 

February 2015

OPEC’s forecasts for non-OPEC oil supply in 2015, million b/d

2013    2014    %         2015    %

Latest estimate        54.24   56.23   3.67     57.09   1.53

Previous estimate   54.24   56.22   3.65     57.49   2.26

 

January 2015

OPEC’s forecasts for non-OPEC oil supply in million b/d

2013    2014    %         2015    %

Latest estimate        54.24   56.22   3.65     57.49   2.26

Previous estimate   54.23   55.95   3.17     57.31   2.43

 

December 2014

OPEC’s forecasts for non-OPEC oil supply in million b/d

2013    2014    %         2015    %

Latest estimate        54.23   55.95   3.17     57.31   2.43

Previous estimate   54.23   55.91   3.10     57.16   2.24

 

 

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