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The End Of The Oil Majors?

Bakken

Friday October 20, 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. Oil majors, or gas majors?

(Click to enlarge)

- Over the past decade, the oil majors have made decisive moves to “gasify” their portfolios. The result is that many of the oil majors are producing nearly as much gas as they are oil. Royal Dutch Shell (NYSE: RDS.A) is the largest LNG exporter in the world.
- Diversification makes sense as concerns over peak oil demand grow. But they have built out gas export capacity to such a degree that they have crashed prices. LNG prices in East Asia are trading at half of what they were three years ago.
- Moreover, demand projections are questionable. The EIA slashed its long-term forecast for gas demand growth – last year it predicted consumption would expand by 2.1 percent per year through 2040. This year, it lowered that estimate to just 1.7 percent. The gap between those two figures, over time, would be equivalent to the entire U.S. market.
- Some analysts even think that lower figure is too optimistic.

2. Oil demand growth slowed in Q3

(Click to enlarge)

- In the second quarter of this year, global oil demand surged by 2.2 million barrels…




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