BP and Oman Oil today signed a heads of agreement with the Government of the Sultanate of Oman committing to amend the Oman Block 61 exploration and production sharing agreement (EPSA), extending the licence area of the block and enabling a further development of the major Khazzan tight gas field. BP is the operator of Block 61 with a 60% interest and Oman Oil holds the other 40%.
U.S. Rig Count is down 30 rigs from last week to 541, with oil rigs down 28 to 439, and gas rigs down 2 to 102. Canadian Rig Count is down 20 rigs from last week to 222, with oil rigs down 13 to 118, and gas rigs down 7 to 104.
The Head of Rosneft noted that the demand for oil and oil products will be growing. The growth has become more diversified - China's role has diminished, but the share of India, other Asian countries and Africa is gradually growing. “More diversified growth seems more resilient, and confirms that many of the mentioned "threats" of reducing the role of oil in the world economy are largely exaggerated”- Sechin said. According to the Head of Rosneft, “an imbalance between oil supply and demand may significantly reduce already by the end of 2016, and by the end of 2017 even lack of oil supply is possible at the market”.
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $43.4 billion in December, up $1.1 billion from $42.2 billion in November, revised. December exports were $181.5 billion, $0.5 billion less than November exports. December imports were $224.9 billion, up $0.6 billion from November.
Based on those trends, and even with the prospective increase in Iranian production, the oil market is likely to move closer into balance by the latter part of this year. That will still leave a significant inventory overhang that will take some time to work off. But it seems likely that the market will show at least some signs of turning by the end of this year.
The stress test had definitely shown that “we still need additional infrastructure, but not everywhere – we really need to target investment where it's really needed and have the projects of common interest (“PCI's”) and how Europe promotes investments should really be targeted to regions where we do need investments.”
The average natural gas spot price at the benchmark Henry Hub for December 2015 of $1.93 per million British thermal units (MMBtu) was the lowest monthly average since March 1999. EIA expects natural gas prices to rise, averaging $2.65/MMBtu in 2016 and $3.22/MMBtu in 2017. Expected price increases reflect consumption growth, mainly from the industrial sector, that outpaces near-term production growth.
From 2014 to 2040, we see global demand for energy rising by 25 percent. This increase is equivalent to the total energy used in North America and Latin America today.
The economy will shrink 1.5 percent this year, Alfa Bank’s Natalia Orlova said in a report on Monday, cutting her previous forecast for an expansion of 0.3 percent.
Therefore, oil prices will rise once more people study the long-term dynamics of oil markets instead of trading on and exploiting the short term news. On the Chicago Mercantile Exchange, WTI for delivery in February 2017 closed at US$37.08 a barrel on January 19, 23% higher than the market closing price for the day.