Crude Oil Price Forecast: Supply Side Focus

US shale price chart

Production declined steadily from 1985 to 2008, rebounded from 2008 to 2015, and declined again in 2016. Birol noted "the world needs to replace 3 million B/D of declines each year-the equivalent of the North Sea".

According to the International Energy Agency, US shale oil output is expected to rise over the next five years.

By 2023, the United States will be prepared to export 5 million barrels a day. Production from the prolific Permian Basin will double over the period and the country's total liquid hydrocarbon output will rise to 17mn bpd from 13.2mn a year ago. In 2018 alone, U.S.'s crude oil output is set to expand by 1.3 million bpd in 2018, allowing it to overtake Saudi Arabia and rival Russian Federation as the world's largest crude producer, the energy watchdog said.

Meantime, exports of USA crude oil to Asia seem to decrease.

The lack of export space has helped contribute to the sell-off of oilsands assets from Shell, ConocoPhillips and Marathon Oil and the lack of new development approvals, said the IEA.

"With limited additional demand for these volumes in the domestic refining system, future USA production will need to clear into export markets", Wood Mackenzie's chief economist Ed Rawle said in a release Monday.

The Port of Corpus Christi's strategic goals include providing surface infrastructure and services in support of maritime and industrial development.




Still, the big drop in supply there and during the last few months in the United States should raise concerns about how well future oil demand will be supplied.

A long list of expansion projects has been proposed for the Corpus Christi region, including the newly announced Cactus II Pipeline sponsored by Plains All American Pipeline LP, which would connect Permian oil to South Texas.

Last year, total upstream oil investment stood at US$41.7 billion, its lowest level since 2005.

Smith adds that while we concur that floating storage off the coast of Iran has been drawn down (something that was nearly complete by April of last year), the reports of the demise of floating storage off Singapore appear greatly exaggerated.

Industry sentiment is indeed improving along with rising prices, but major oil companies are reluctant to invest vastly higher sums.

Venezuela's oil production fell 13% in 2017 to a 28-year low of about 2.072 million bpd. With forecast capacity of 36.3 million bpd, Opec will be supplying less than 35 per cent of global demand by 2023 compared to its historic share around 40 per cent. But what could have been two of the biggest topics of conversation - oil prices and OPEC output levels - were not in the cards, as such a broad conversation would run afoul of US antitrust rules against price-fixing. However, the country's more stringent policies to curb air pollution may slow growth. However, it will inevitably drive up costs for the nation's oil and gas producers. Rising global oil demand has so far absorbed the extra United States crude barrels, limiting the impact on prices.

The news comes at a tense time for global trade. Besides, U.S. energy firms added one oil rig last week, the fifth weekly increase in a row, bringing the total count up to 800, the highest since April 2011, pointing to more increases in output to come.

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