OIL PRICE: OPEC ACTIONS
Brent crude oil prices fell to $84/bbl at the end of October from $95/bbl at the beginning of the month. A handful of core drivers for this tumble include weakening outlooks for global economic and oil demand growth, the return to the market of previously disrupted Libyan crude oil production, and continued growth in US tight-oil production.
In the most recently released Short-Term Energy Outlook, the US Energy Information Administration projects that Brent crude oil prices will average $83/bbl in 2015, $18/bbl lower than forecast in last month's STEO.
"There is significant uncertainty over the crude oil price forecast because of the range of potential supply responses from the Organization of Petroleum Exporting Countries, particularly Saudi Arabia, and US tight-oil producers to the new lower oil price environment," EIA said.
As noted by the outlook, Saudi Arabia's role in the oil market going forward is highly uncertain. Unlike in the past acting as the swing producer, the kingdom has stated that it would rather maintain its export market share than cut production to bolster oil prices.
"Saudi Arabia will continue to play some role as a swing producer, but perhaps to a lesser extent, as the country is sensitive to significant losses in market share," EIA said. The agency still projects Saudi Arabia's production to decline in 2015 compared with this year, but by a smaller amount than previously expected.
Libya's crude oil production, meanwhile, reached 1 million b/d in October, its highest level since early July 2013. However, Libya's output has since fallen due to new production outages.
In this month's STEO, EIA expects global consumption to rise 900,000 b/d in 2014 and 1.1 million b/d in 2015, compared with 1.3 million b/d in 2013. Consumption by member countries of the Organization for Economic Cooperation and Development is expected to decline 300,000 b/d in 2014, led by Japan and Europe. The global demand forecast was revised downward by 200,000 b/d to average 92.5 million b/d in 2015, based on weaker global economic growth prospects for next year.
Non-OPEC production is expected to increase 1.9 million b/d in 2014 and 900,000 b/d in 2015. The US will account for most of the projected non-OPEC supply growth, increasing 1.5 million b/d in 2014 and 1.1 million b/d in 2015.
However, EIA's US total supply growth forecast in 2015 has been revised downward from last month by 100,000 b/d, reflecting the recent decline in oil prices and the expectations that West Texas Intermediate crude spot prices will remain near $80/bbl through 2015.
|March, 16, 10:40:00|
|March, 16, 10:35:00|
|March, 16, 10:30:00|
|March, 16, 10:25:00|
|March, 16, 10:20:00|
|March, 16, 10:15:00|
BLOOMBERG - While Europe as a whole gets more than a third of its gas from Russia, that share is lower in the U.K., which receives the bulk of its fuel from North Sea fields and Norway. Still, Moscow-based Gazprom PJSC was the second-biggest supplier to major industrial consumers in the U.K. last year, according to Britain’s energy regulator Ofgem.
FT - of the six LNG tankers that have made deliveries into the UK so far in 2018 three have carried cargoes originally from Russia, leading to questions about whether Moscow was gaining a foothold in the UK gas market after starting up the Yamal LNG facility in Siberia late last year.
REUTERS - So far this year, two Yamal cargoes unloaded at British terminals for domestic consumption, accounting for about a third of Britain’s 2018 LNG imports after typical supplier Qatar pre-sold the bulk of its winter output to Asia last year.
REUTERS - U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $60.77 a barrel at 0753 GMT, up 6 cents, or 0.1 percent, from their previous settlement. Brent crude futures LCOc1 were at $64.62 per barrel, down just 2 cents from their last close.