UNCERTAIN OIL PRICES
EIA - The U.S. Energy Information Administration expects global liquid fuels demand to increase in 2018, but not keep pace with supply growth, resulting in global liquids inventories increasing modestly in 2018. STEO forecasts increasing global liquid fuels inventories by an average of 50,000 barrels per day (b/d) in 2018, a downward revision from a 290,000 b/d inventory increase forecast in the November STEO (Figure 1). The change in STEO is driven by upward historical revisions to Chinese consumption and downward revisions to forecast production from countries within the Organization of the Petroleum Exporting Countries (OPEC).
On November 30, 2017, OPEC announced an extension of its agreement to reduce crude oil production through the end of 2018, which was broadly in line with both EIA's November STEO and market expectations in the days leading up to the meeting. The non-OPEC countries that agreed to crude oil production cuts in 2017 also agreed to continue limiting output through the end of 2018. Saudi Arabia and Russia will co-chair a monitoring committee designed to assess the group's adherence to the production targets. The group plans to reassess target production levels at their June 2018 meeting in the context of market conditions at that time. EIA estimates OPEC crude oil production averaged 32.5 million b/d in 2017, a 0.2 million b/d decrease from 2016 levels, and forecasts OPEC crude oil production to average 32.7 million b/d in 2018.
Although OPEC is expected to restrain production growth, EIA forecasts that higher output from non-OPEC countries will contribute to overall growth in world liquid fuels production in 2018. The non-OPEC outlook for liquid fuels production is 0.1 million b/d higher than EIA's November STEO, averaging 60.3 million b/d in 2018, 1.7 million b/d higher than the 2017 level. This growth, together with the forecast 0.3 million b/d growth in OPEC crude oil production and another 0.1 million b/d increase in OPEC non-crude liquids production, results in forecast total global liquids production growth of 2.0 million b/d in 2018 (Figure 2). EIA expects that crude oil price increases in late 2017 will support growth in U.S. crude oil production to more than 10.0 million b/d by mid-2018. Overall U.S. crude oil production is forecast to increase by an average of 0.8 million b/d in 2018. Canada, Brazil, Norway, the United Kingdom, and Kazakhstan are also forecast to add a combined 0.7 million b/d of growth in liquids production in 2018.
Despite higher oil prices, EIA expects global liquid fuels demand to increase by more than 1.6 million b/d in 2018, up from growth of almost 1.4 million b/d in 2017. Demand growth is not forecast to keep pace with supply growth, however, resulting in global liquids inventories increasing modestly in 2018. With global inventories expected to increase in 2018, EIA forecasts Brent crude oil prices will decline from current levels of more than $60 per barrel (b) to an average of $57/b in 2018, nearly $2/b higher than previously forecast in the November STEO. EIA forecasts West Texas Intermediate (WTI) crude oil prices to average $53/b in 2018, which is also nearly $2/b higher than forecast in the November STEO.
The forecast for oil prices remains highly uncertain. WTI futures contracts for March 2018 delivery, traded during the five-day period ending December 7, 2017, averaged $57/b. The value of options contracts currently establishes the lower and upper limits of the 95% confidence interval for the market's expectations of monthly average WTI prices for March at $48/b and $68/b, respectively (Figure 3). The 95% confidence interval for market expectations widens considerably over time, with lower and upper limits of $36/b and $84/b, respectively, for prices in December 2018.
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WNA - Apart from adding capacity, utilisation of existing plants has improved markedly since 2000. In the 1990s capacity factors averaged around 60%, but they have steadily improved since and in 2010, 2011 and 2014 were above 81%. Balakovo was the best plant in 2011 with 92.5%, and again in 2014 with 85.1%.
WNA - India has a flourishing and largely indigenous nuclear power programme and expects to have 14.6 GWe nuclear capacity on line by 2024 and 63 GWe by 2032. It aims to supply 25% of electricity from nuclear power by 2050.
WNA - Mainland China has 38 nuclear power reactors in operation, about 20 under construction, and more about to start construction. The reactors under construction include some of the world's most advanced, to give a 70% increase of nuclear capacity to 58 GWe by 2020-21. Plans are for up to 150 GWe by 2030, and much more by 2050.
PLATTS - "The domestic uranium mining industry needs US government assistance to survive the foreign onslaught -- particularly from Russia and Kazakhstan -- that has undermined the US uranium industry while new players -- particularly China -- will soon make the situation worse," Energy Fuels and Ur-Energy said in a petition they jointly filed with the department.