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The UK’s crude oil loadings remained below 800,000 bpd for the third month in a row in February, while authorities expect Britain’s crude oil production to decline through at least 2024, Fotios Katsoulas, Liquid Bulk Principal Analyst, Maritime & Trade at IHS Markit, said on Friday.
In February, the Far East was among the top destinations for UK crude oil, with UK crude flows significantly rising to 265,000 bpd, up from 139,000 bpd in January, Katsoulas said.
UK crude flows to northwest Europe and the Mediterranean, on the other hand, dropped significantly, providing more space for China, according to IHS Markit’s analyst.
The UK faces two major headwinds for its crude oil production—the continued uncertainty around Brexit (and the possibility of a really disorderly one), and a trend of declining oil production through 2024.
Crude oil production in the UK will decline this year to 940,000 bpd from last year’s 980,000 bpd, the Oil and Gas Authority said in a new report, adding that output would continue to decline in the next five years as well, reaching 760,000 bpd in 2024.
Interestingly enough, the decline in production will come just a year after output—including crude oil and natural gas liquids—hit a seven-year high of 1.09 million bpd, thanks, the OGA said, to the launch of 30 new fields since 2015 along with better asset integrity and more enhanced oil recovery projects at legacy fields.
Still, despite the negative trend, the Oil and Gas Authority has updated its long-term production projection to 2050. Now, the authority expects the cumulative output of oil and gas for the period between 2015 and 2050 to be 3.9 billion barrels of oil equivalent higher than it projected in March 2015 and 200 million barrels of oil equivalent higher than OGA’s September 2018 projection.
A “disorderly Brexit” and trade disputes are two of the main factors that could lead to slower international trade and oil demand growth, the International Energy Agency (IEA) said in its Oil 2019 report published earlier this week.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.