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Summarized global oil balances for 2017-2019 as of November 2018

If we take the average forecast of five agencies (Energy Aspects, PIRA Energy, IEA, OPEC and EIA) for each of the following items;

1.OECD Demand,
2.Non-OECD demand,
3.Non-OPEC excl. North America/FSU,
4.North America,
5.FSU
6.OPEC NGL’s

…and then drag OPEC crude oil production flat forward from October 2018 (as reported as secondary source in OPEC’s November report); then we arrive at a global oil over supply of 1.2 million b/d for 2019.

HOWEVER: The OPEC supply of 32.9 million b/d for October 2018 includes Saudi Arabia at 10.6 million b/d, Libya at 1.1 million b/d, Iran at 3.3 million b/d and UAE at 3.2 million b/d.

For 2019 one could easily assume that these countries will produce the following:

Saudi cuts 0.5 million b/d to 10.1 million b/d, Iran drops by 0.5 million b/d to 2.8 million b/d (they produced 3.8 million b/d in 2017), UAE cuts back 0.2 million b/d to 3.0 million b/d (the country produced 2.9 million b/d in 2017) and Libya drops back 0.3 million b/d to 0.8 million b/d (which was the countries production in 2017). The sum of these cuts from OPEC countries amount to 1.5 million b/d. These are all very plausible numbers and the result would then be a 0.3 million b/d stock draw in 2019 instead of a 1.2 million b/d stock build…

 

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