Market research

Norway’s oil producer Statoil issued its “Energy Perspective” report on June 8. It said that oil demand is expected to increase into the 2020s. Dependent on the scenario, oil demand in 2050 ranges from below 65 million to above 120 million barrels per day (bpd), compared to around 97 million bpd today. “Regardless of (the) scenario, and in addition to massive investments in renewable energy, we will continue to need large investments in oil and gas due to (a) natural decline in supply from existing fields. In the “renewal” scenario, oil supply in 2050 from new reserves not currently in production, will correspond to 15-25 times the current production of Norway,” it said. “Electric cars and plug-in hybrids could account for around 90 percent of the private cars in 2050 and efficiency will be much higher than today. Still, with heavy duty and maritime transport, aviation and petrochemical industry growth, oil demand will be above 60 million bpd,” said Eirik Wærness, Statoil’s chief economist, in a statement.
Societe Generale
The bank expects the OPEC to extend its output cuts when its ministers meet in November this year and again in summer 2018, according to a report dated June 8 made by the bank’s analyst Mike Wittner. OPEC will maintain its current cuts through 2018, holding its production at 32 million barrels per day (bpd), the report said. “At this point, we know the OPEC cuts are real. But it is taking longer than expected to see results” in areas such as onshore stockpiles, according to the bank. Given the relatively weak fundamentals in the oil market, OPEC needs to adhere to the cuts through the first six months of 2018 and not only through March 2018 as the deal originally planned. If OPEC does so, that will allow the group to expand its production by 500,000 bpd in the second half of 2018, the report said.
Morgan Stanley
The bank issued a report on June 8 saying that oil prices usually fall whenever OPEC loses its market share. “Seaborne oil exports accelerated globally in May, driven by both non-OPEC countries as well as OPEC countries exempt from quotas. This suggests that production cuts by OPEC-11 are increasingly coming at the expense of market share. When that happens, history shows that oil prices usually weaken,” the report said. The report also said that tanker-tracking data show that waterborne exports increased strongly in May across the world, up by 2.2 million bpd from April and 3.3 million bpd from May 2016. “Tanker tracking data can be noisy but is the most timely indicator of supply that is available and it tends to be indicative of the direction of exports. Also, this data is consistent with anecdotal evidence that physical markets remain well supplied,” it said.

Source: Arab News