The global oil market is tightening from a peak supply and demande imbalance inQ2 2015, according to Rystad Energy’s latest research. The June Global Oil Market Trends Report sees insufficient oil demand growth to prevent further counter-seasonal stock building in Q3 and Q4 2015. -We have a neutral view on oil prices towards the end of the year, but see some downside risk towards the end of Q3 when demand for crude and key products comes off its summer-peak, says Bjørnar Tonhaugen, VP Oil and Gas Markets. Non-OPEC liquids supply growth grinds to a halt in 2016 with only 200 thousand barrels per day of additions, while it is expected that global demand will grow 1.1 million barrels per day next year. The supply overhang will persist into the first half of next year, before oil and product inventories will gradually start to fall globally in the second half of 2016. Prices will be higher Key to the supply outlook is the resiliency of US shale activity. Most North American shale plays now have average WTI breakeven oil prices of just below USD 50/bbl. “We have lowered our breakeven oil price curve, owing to cost compression and efficiency gains observed in the North American shale industry. Nevertheless, the cost curve for shale is not flat, but steep, as marginal plays still require prices above 80-90 USD/bbl to make a return, says Bjørnar Tonhaugen. To meet the future demand for oil towards 2020, Rystad Energy’s field-by-field analysis continues to support oil prices higher than where current crude futures are trading post-2016. “We are bullish on oil from 2017, even though we expect key OPEC producers to continue to focus on market share."
Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
Rystads global analysis Rystad Energy’s headquarters are located in Oslo, Norway, with additional research teams in India. Further presence has been established in the UK (London), USA (New York & Houston), Russia (Moscow), Africa as well as South East Asia.
Bjørnar Tonhaugen, VP Oil & Gas Markets
Mobile: +47 46 66 25 09
bjornar.tonhaugen@rystadenergy.com
Julia Weiss, VP Marketing
Mobile: +47 48 29 87 61
julia.weiss@rystadenergy.com
