• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 2 hours Oil prices going Up? NO!
  • 1 day Could Venezuela become a net oil importer?
  • 6 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 2 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 20 mins Renewables to generate 50% of worldwide electricity by 2050 (BNEF report)
  • 4 hours Could oil demand collapse rapidly? Yup, sure could.
  • 1 day Gazprom Exports to EU Hit Record
  • 43 mins Oil prices going down
  • 1 day EU Leaders Set To Prolong Russia Sanctions Again
  • 1 day Why is permian oil "locked in" when refineries abound?
  • 1 day Oil Buyers Club
  • 2 days Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 55 mins Saudi Arabia turns to solar
  • 1 day EVs Could Help Coal Demand
  • 2 days China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 19 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
Alt Text

Why OPEC Won't Flood The Oil Market

Saudi Arabia and Russia are…

Alt Text

China Plans To Create A $78 Billion Natural Gas Giant

Chinese regulators are looking to…

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

Trending Discussions

IEA Thinks An Oil Price Rebound Is A Distant Possibility

IEA Thinks An Oil Price Rebound Is A Distant Possibility

Forty-six years after the debut of Sesame Street, and crude has tried to hold on to a positive attitude (think: Big Bird), but is ending up more like Oscar the Grouch. And it can be excused for this grumpy disposition, given another round of poor overnight economic data, combined with a bout of dollar strength.

Chinese inflation data stumbled through deflationary terrain for the first month in five as October dropped by 0.2 percent on the prior month. On a year-over-year basis, inflation is now up a mere 1.3 percent, and aside from a blip lower in February of this year, it is the lowest level since late 2009. The change in the price of goods (aka, producer prices) was negative on a year-over-year basis for the 44th consecutive month, down -5.9 percent for October, which was below the consensus of -5.8 percent. Related: Fusion Energy Facing A Major Test This Month

China CPI, YoY (source: investing.com)

A dearth of data elsewhere after last week’s onslaught has left slim pickings on the economic data front. French industrial production was in line with consensus, up 0.1 percent in September on the prior month, while Italian industrial production grew by 0.2 percent, but below consensus of 0.5 percent. Both U.S. import and export price indexes were negative on the prior month. Related: Venezuela Liquidating Assets As Economic Crisis Worsens

The below comment is from Saudi Arabia’s vice oil minister, Prince Abdulaziz bin Salman, who spoke yesterday in Qatar. It is particularly resonating: ‘Beyond 2016, the fall in non-OPEC supply is likely to accelerate, as the cancellation and postponement of projects will start feeding into future supplies, and the impact of previous record investments on oil output starts to fade away’.

This is a theme echoed by IEA today too, in the release of their World Energy Outlook (complete with accompanying press conference). The agency alluded to a similar theme as our aforementioned Saudi Prince, saying U.S. supply will decline by three million barrels per day if prices hover around in the $40s through the rest of the decade (um, seems unlikely). As the below chart illustrates, IEA projects that prices will need to be between $60-70 in the coming years to keep production on an even keel.

(source: IEA) Related: The Middle East Could Face A Historic Crisis By Century’s End

All the while, IEA highlights that we are a long way from a price recovery, saying we are unlikely to see $80 oil until 2020. Later today we get EIA’s Short Term Energy Outlook, which will no doubt affirm fears of immediately falling U.S. production given what we saw from yesterday’s monthly drilling productivity report (hark, Eagle Ford production now down 25 percent from its high earlier in the year).

Countering this view, however, is Q3 earnings season from the oil and gas industry, which presents a view in juxtaposition to this: production is holding up, as are credit lines, while rampant efficiency gains are helping to offset severe cost-cutting. In addition, we have Gulf of Mexico production rising to counter some of the shale play losses; all may not be as bad as some think.

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage

Trending Discussions


Leave a comment

Leave a comment




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