• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 20 mins EU has already lost the Trump vs. EU Trade War
  • 5 mins More dumbed down? re Hong Kong Act of Congress
  • 19 hours Impeachment S**te
  • 3 hours Pope Proposes New Sin: Thou Shalt Not Destroy The Harmony Of The Environment
  • 5 hours Article: Did Exxon only make $39 Million onshore U.S. last quarter ?
  • 1 day 55.00 WTI
  • 10 hours Visualizing Pennsylvania Oil & Gas Production (Through September 2019)
  • 7 hours U.S. Shale To Break Records Despite Bearish Rhetoric
  • 1 day Everything You Need To Know About Trump
  • 37 mins What are the odds of 4 U.S. politicians all having children working for Ukraine Gas Companies?
  • 1 day Water, Trump, and Israel’s National Security
  • 4 hours Last I Checked
  • 20 mins Petroleum Industry Domain Names
  • 1 hour U.S. Shale Output may Start Dropping Next Year
Alt Text

The Uncertain Fate Of U.S. Shale In 2020

The fate of U.S. shale…

Alt Text

Icahn: Occidental Won't Hit Target Without Asset Sale

Activist investor Carl Icahn has…

Alt Text

The No.1 Oil Hotspot For 2020

While the Middle East gets…

Arthur Berman

Arthur Berman

Arthur E. Berman is a petroleum geologist with 36 years of oil and gas industry experience. He is an expert on U.S. shale plays and…

More Info

Premium Content

IEA Offers No Hope For An Oil-Price Recovery

The International Energy Agency (IEA) November report offers no hope for an oil-price recovery any time soon. Over-supply and weak demand for oil will dominate through 2016.

The world has a 1.6 million barrel per day oil production surplus (supply minus demand) as the oil glut enters its 8th consecutive quarter (Figure 1).

(click image to enlarge)

The supply surplus is 710,000 barrels per day lower than it was in the 2nd quarter of 2015 but is higher than any other quarter since the oil-price collapse began. In fact, it is higher than any other quarterly surplus in the past decade (Figure 2). Related: U.S. Oil Production Holding Its Own, Which Can Only Mean One Thing…

(Click to enlarge)

The oil demand forecast for 2015 is the only hopeful part of the IEA report with demand growth estimated at 1.8 million barrels per day compared to 2014 (Figure 3). Related: Is The Oil Industry Really Subsidized?

(Click to enlarge)

There are two important qualifications, however, to this good news. Related: Oil Tankers Are Filling Up As Global Storage Space Runs Low

First, the comparison is positive only compared to 2014, the worst year for demand growth since the Financial Collapse in 2008. Second, demand growth of 1.8 million barrels per day includes IEA’s estimate for the 4th quarter of 2015. Growth through the 3rd quarter is only 1.5 million barrels per day.

The really bad news, however, is that demand growth for 2016 will fall to 1.2 million barrels per day. This, of course, is also a forecast and is in comparison to the estimated 1.8 million barrels per day for 2015. If 2015 demand growth remains at 1.5 million barrels per day, the 2016 forecast will be flat with 2015.

IEA’s November report is consistent with the EIA report released yesterday. EIA’s report provides a more detailed monthly account of production and consumption than IEA’s quarterly data, and EIA shows that October consumption (a proxy for demand) decreased 510,000 barrels per day compared with September 2015. It further shows that production was flat and that the surplus is not declining as the IEA quarterly data suggests.

The IEA and EIA reports taken together lead me to two unavoidable and disturbing conclusions: over-production continues and a weak global economy is an obstacle to oil-demand growth.

By Art Berman for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play