IEA: OIL INVESTMENT
The International Energy Agency's chief economist on Friday urged oil producers to boost investment in new projects to meet an anticipated rise in demand, a move that he said may avoid oil price spikes in coming years.
Speaking in Madrid during the presentation of the IEA's annual report, Fatih Birol said that a tumble in oil prices makes it hard to believe a supply crunch may happen any time soon, but the slow pace of development of new projects makes it imperative to act.
"We shouldn't just ignore tomorrow's challenges," Mr. Birol said. "This is hard point to make in this context of lower oil prices, but we need to invest now."
A continued oil slide hammered commodity-dependent currencies as well as shares in oil and gas companies Friday, a day after the Organization of the Petroleum Exporting Countries left its output target unchanged, diminishing hope of any imminent respite for the ailing commodity.
In early trade, Brent crude fell to its weakest level in four years, having already plummeted nearly 7% on Thursday. It later picked up slightly.
Analysts had estimated OPEC would need to take 1 million to 1.5 million barrels a day off the market to support oil prices, which have fallen by more than 30% since the summer, but its members didn't bow to the market pressure.
In its report, IEA estimates that oil demand will hit 104 million barrels a day in 2040, from 90 million barrels last year, with Asian countries accounting for two-thirds of overall demand.
Such a production increase would imply $900 billion worth of investment a year through the 2030s in oil exploration and production, IEA says. The organization singled out four key focus areas for future production: the U.S., Canada, Brazil and the Middle East.
Mr. Birol said that oil prices are probably close to rebound, and should be sustained by demand.
Earlier this month, Mr. Birol had warned that Arctic, offshore and unconventional oil projects are facing major challenges with international oil prices around or below $80 a barrel, and warned that oil companies may revise spending downward, potentially hurting future supply.
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U.S. EIA - Energy companies’ free cash flow—the difference between cash from operations and capital expenditure—was $119 billion for the four quarters ending June 30, 2018, the largest four-quarter sum during 2013–18 Companies reduced debt for seven consecutive quarters, contributing to the lowest long-term debt-to-equity ratio since third-quarter 2014
OPEC - Total oil demand for 2018 is now estimated at 98.82 mb/d. In 2019, world oil demand growth is forecast to rise by 1.41 mb/d. Total world oil demand in 2019 is now projected to surpass 100 mb/d for the first time and reach 100.23 mb/d.
ARAB NEWS - Oil exports from southern Iraq are heading for a record high this month, two industry sources said, adding to signs that OPEC’s second-largest producer is following through on a deal to raise supply and local unrest is not affecting shipments.
PLATTS - The International Energy Agency expects the US to account for 75% of the global growth in natural gas exports over the next five years, a bullish outlook for LNG developers facing challenges at home getting projects off the ground and abroad with tariffs affecting trade flows.