• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 2 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 2 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 2 days Schlumberger Warns Of Moderating Investment In North America
  • 2 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 2 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 2 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 2 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 3 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 3 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 3 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 3 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 3 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 3 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 4 days Russia, Saudis Team Up To Boost Fracking Tech
  • 4 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 5 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 5 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 5 days China To Take 5% Of Rosneft’s Output In New Deal
  • 5 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 5 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 5 days VW Fails To Secure Critical Commodity For EVs
  • 5 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 6 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 6 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 6 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 6 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 7 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 7 days Aramco Says No Plans To Shelve IPO
Alt Text

A New Oil Crisis Is Developing In The Middle East

As Iraqi-Kurds prepare to fight…

Alt Text

OPEC Seeks Help From U.S. Shale

OPEC’s secretary general has asked…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Bearish OPEC Report, Stronger Dollar Send Oil Prices Down

Bearish OPEC Report, Stronger Dollar Send Oil Prices Down

One hundred and eighty-five years after the birth of American poet Emily Dickinson, and OPEC has been waxing lyrical today in its latest monthly oil report. The cartel has tweaked its oil demand growth expectations up slightly this year to 1.53 million barrels per day, an increase of 30.000 barrels per day from last month, led by adjustments to European and Asian demand. Its estimate for demand growth next year is unchanged at 1.25 million bpd.

On the supply side, OPEC boosted its 2015 forecast for non-OPEC production by 0.28 million bpd, driven by signs of staunch production from the US, UK, and BRICs (minus India). Non-OPEC production for next year, however, is seen contracting by 250,000 barrels per day, as the drop-off in US shale production accelerates in the coming months. All the while, current OECD inventories are 244 million barrels above the five-year average, at a total of 2,955 million barrels (aka, a glut). Related: 2016 Spells More Gloom For Oil Producers

In a review / outlook piece in the report, the cartel highlights the theme of strong consumption (think: gasoline demand) from the U.S., Eurozone, China and India due to lower prices. It also highlights economic contraction in Brazil and Russia, which is offsetting stronger-than-expected growth from India. While gasoline demand is strong, distillate demand is less so as industrial production falls across most regions:

(Click to enlarge) Related: This Joint Venture Could Stir Up The Lithium Market

In terms of economic data flow, the ‘predictable data point of the day‘ award goes to the Bank of England, who kept interest rates unchanged (as they have done for the last six-and-a-half years). Meanwhile, endorsing the negativity expressed in the OPEC report, the Russian economy contracted by 4.1% in Q3 (YoY).

Onto the U.S., and weekly jobless claims came in at 282,000; well above consensus of 269,000, and the worst print since early July (but likely mottled by seasonal workers). U.S. exports for November were worse than expected, down -0.6% (think: stronger dollar), while imports were better-than expected at -0.4% (think: stronger dollar).

Hot on the heels of news that North Dakota saw oil production rise in October (albeit by 5,000 bpd) is this piece from today’s Wall Street Journal which highlights the equity outperformance of stocks from the Permian Basin, as the shale play sees ongoing improved efficiency gains shoring up production levels.

The situation is seen as much more dire for the rest of the industry. Of eighty U.S.-listed E&P companies, only eleven have seen their stocks rise this year. Of those eleven, eight do all or most of their drilling in the Permian. Related: How Far Can The Syria Conflict Spiral Out Of Control: Interview With Pelicourt

(Click to enlarge)

Finally, both Chevron and ConocoPhilips have slashed capital expenditures next year in their ongoing efforts to protect their dividends. ConocoPhilips has slashed spending by 25% in 2016, as it ‘recognizes the current environment, which remains challenging‘, while Chevron has similarly cut capital expenditure by 24%. Global exploration and production spending is projected to fall by $70 – $115 billion next year, depending upon your estimate of choice. As for today, the OPEC report is tag-teaming with a stronger dollar to pummel crude prices once more.

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News