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Page added on September 5, 2018
Say Goodbye To Cheap Oil… For Now
Oil prices will be much higher over the next few years than previously thought, according to a new report from Barclays.
The investment bank significantly raised its pricing forecast for 2020 and 2025 in its annual medium-term oil report. Barclays expects Brent to average $75 per barrel in 2020, up from a previous estimate of $55, while prices may average $80 in 2025, up from $70 previously.
The bank noted that the market is dramatically different than it was at this point last year when it issued its previous medium-term report. U.S. shale drillers are maintaining capital discipline, which could lead to lower than expected production levels. OPEC and Russia have demonstrated resolve and laid the groundwork for long-term market management, which could keep supply off the market for years to come.
Also, the U.S. has deployed an aggressive sanctions campaign against Iran and even Venezuela, measures that should translate into more than a million barrels of per day of supply losses. And finally, “several key OPEC producers are at risk of being failed states,” Barclays concluded.
But that does not mean that the world is set to suffer from supply shortages. “Prices could reach $80 and higher in the short term, but these price levels have reawakened the industry’s animal spirits,” Barclays said. “In our view we are not on the cusp of another boom cycle in oil prices because of an impending ‘supply gap.’”
Any near-term price spike will be driven by sentiment and temporary rallies, rather than a fundamental gap in supply. “Though we expect that a price range above $80 will become the new norm next decade, our market balances do not justify those price levels in the next one to two years,” Barclays argued. “There are many other possible reasons to be bullish during that time frame, but the ‘supply gap’ is not one of them.”
A growing concern among oil analysts is the possibility of a supply shortage in the early 2020s because of the steep decline in upstream spending since 2014 and the dearth of final investment decisions on new projects. Barclays dismisses that concern, arguing that the volume of new supply in the pipeline, while lower compared to pre-2014 levels, is still significant. Plus, decline rates at a mature oil fields have improved in the last two years as oil prices have increased.
However, the bank still takes a much more bullish outlook on the oil market than it did previously. A combination of investment deferrals from an oil industry still exercising some semblance of capital discipline will lead to less upstream production than otherwise might be the case. That, combined with supply outages in a few key countries, could translate into roughly 2.5 million barrels per day of oil removed from the market through 2025, Barclays estimates, pushing Brent prices up to $85 per barrel.
Still, that outcome is not a foregone conclusion, as there are always uncertainties. Oil prices could still fall in a scenario that includes lower GDP, higher than expected Permian production, or a spike in retail prices because of regulations from the International Maritime Organization taking effect in 2020 that will cut down on high-sulfur fuel supply.
One interesting conclusion from the report is that Barclays does not expect a boom-bust phenomenon to characterize the oil market over the coming decade, despite such a historic tendency. Short-cycle U.S. shale supply, steady demand growth, and other global supplies should keep oil prices stuck within a $15-per-barrel range. “Of course, a perfect storm of bullish factors would move prices in excess of $100/b if disruptions worsen, economic growth stays resilient, and Permian bottlenecks are not resolved,” Barclays cautions. “Yet we do not see such a price level as sustainable given government stockpiles, a more tenuous economic outlook, and Saudi Arabia and Russia’s stated willingness to keep prices rangebound by raising output.”
Barclays expects the adoption of electric vehicles to continue to scale up, reaching a cumulative 55 million units by 2025, which erases about 1 million barrels per day of oil demand. Gasoline demand could peak by 2030, the bank says.
Astute readers would note that while Barclays expects oil prices to average $80 per barrel in 2025, Brent is flirting with that price level right now in September 2018. The supply losses from Iran, unfolding faster than expected, have complicated the supply picture for the rest of 2018. Brent has gained nearly $9 per barrel since mid-August.
By Nick Cunningham of Oilprice.com
43 Comments on "Say Goodbye To Cheap Oil… For Now"
Cloggie on Wed, 5th Sep 2018 11:18 pm
Good.
$150 oil will speed-up the energy transition greatly.
makati1 on Wed, 5th Sep 2018 11:26 pm
Sorry Cloggie. I wish I could share your renewables dream but it is pure fantasy. Yes, $150 oil will speed up the change, to an 1800s lifestyle not your renewables fantasy future. Not going to happen. Not even close.
MASTERMIND on Wed, 5th Sep 2018 11:51 pm
Clogg
You can’t transition transportation, it requires liquid fuels..Oil is what powers globalism, ships, planes, and trucks..
Anonymouse1 on Thu, 6th Sep 2018 12:40 am
You tell him, davyturd.
Cloggie on Thu, 6th Sep 2018 1:05 am
Sorry Cloggie. I wish I could share your renewables dream but it is pure fantasy. Yes, $150 oil will speed up the change, to an 1800s lifestyle not your renewables fantasy future. Not going to happen. Not even close.
I know your opinion, big shrug. Let’s agree to disagree.
You can’t transition transportation, it requires liquid fuels..Oil is what powers globalism, ships, planes, and trucks..
Complete BS. We have e-bikes, e-cars, e-trains and soon e-trucks…
https://www.youtube.com/watch?v=t8kZ7XX0-ms
(DAF e-truck produced in my native Eindhoven, 5 minutes cycling from where I live; at 0:22 the e-truck is driving over the Hightech campus, where I will bike to in 15 minutes on my non e-bike).
Both Airbus and Boeing are working on e-planes (hydrogen).
In Holland, Belgium, Norway and elsewhere there are working on e-shipping:
https://www.dw.com/en/are-electric-vessels-the-wave-of-the-future-in-shipping/a-43046309
It is going to work out fine, that solar economy.
Cloggie on Thu, 6th Sep 2018 1:10 am
And just in case millimind will whine again about limited range of e-vehicles, there is a work-around for that as well:
https://deepresource.wordpress.com/2018/05/08/e-road-e-vehicles-breakthrough-in-sweden/
If trains can run on electricity uninterrupted for thousands of miles, so can e-vehicles (sedan’s, trucks). A small battery, guaranteeing a range of 100 km is sufficient for “the last mile”, if the vehicle can charge during driving on the main routes.
Many buses in Eindhoven/Holland are now electric:
https://www.youtube.com/watch?v=Yw0D_B6DZb4
(you hardly hear the f*)
makati1 on Thu, 6th Sep 2018 1:51 am
Dream on Cloggie. That must be some powerful stuff you are smoking. Renewables require FFs and always will.
They cannot be made without FFs from mines to final sale.
The roads they travel on cannot be maintained without FFs.
The manufacture and installation of renewable energy equipment requires FFs.
The replacement parts cannot be made without FFs.
Take off the blinders and rose colored glasses and look at reality.
A postage stamp county like yours is not the rest of the world. Metro Manila has more people than your country has in total. Nor will the future you plan for Europe ever come about. When the dollar financial system goes down, so will all of your dreams. We certainly will be on the way to extinction as a species, not climbing to some techie paradise. It has become a religion to you guys and is only supported by belief, not facts. You are in one huge state of denial. Nothing more.
Cloggie on Thu, 6th Sep 2018 3:16 am
“Dream on Cloggie. That must be some powerful stuff you are smoking. Renewables require FFs and always will.”
The largest scientific and technological powerhouse on the planet, the European Union, says it can be done.
https://en.m.wikipedia.org/wiki/Energy_policy_of_the_European_Union
deadly on Thu, 6th Sep 2018 3:33 am
Gotta have fuel for helicopters that provide emergency services, otherwise too many people will die for lack of immediate measures to allow them to survive.
No oil for transportation purposes will definitely have an effect on quality of life.
That’s why there is a market for crude oil, people buy and use it. Simply amazing how a market can develop when something becomes available for human use.
Of course, with no oil, a lot more people are going to die, so no oil will be a blessing in disguise. That is the goal, is it not, to have a decline in population? No oil will help a lot to get those humans shuffling off from their mortal coil.
What I observed yesterday later on during the daylight hours:
Yesterday’s skies were empty. No planes were flying through the airspace above up there in the sky. Clear skies for a hundred miles all around. Not a single plane in flight did I see.
The rains along the eastern seaboard, in Chicago, the inclement weather was the culprit for cancelled flights.
It was like the good old days of the 50s. Now and then you would hear a plane take off and now and then there would be a plane flying overhead.
It really was quite remarkable. Usually, planes are flying at 35,000 feet like cranes flying a mile high this time of year.
MASTERMIND on Thu, 6th Sep 2018 8:17 am
Clogg
Mak is right..There is no such thing as renewable’s, its just marketing..And you can’t transition transportation, it needs liquid fuels..
Get a brain Moran!
goat1001 on Thu, 6th Sep 2018 8:53 am
It’s the EROI, it’s all about the EROI. That sets the base for what can and cannot be done economically or practically with any energy source.
Davy on Thu, 6th Sep 2018 11:33 am
“Ruble Tumbles On Medvedev Comments, UK Allegations As Russian Yields Surge”
https://tinyurl.com/yafygjug
“The Russian ruble tumbled as much as 2%, sliding to 69.63, the lowest level against the dollar since March 2016 and its biggest drop since August 8 after Russia’s prime minister Dmitry Medvedev effectively admitted that US sanctions are starting to bite, and said that he is hopeful that the Bank of Russia becomes “active” as rates are high. “It’s necessary to move from neutral to stimulating oversight of the credit sphere to create conditions for more confident economic growth,” Medvedev said at conference in Moscow, adding that “Interest rates remain quite high despite the successes in holding back inflation.”
“Earlier, Russia’s Deputy Finance Minister Vladimir Kolychev told Bloomberg TV that Russia is ready to take the emergency step of buying its own ruble debt if a new wave of U.S. sanctions threatens to upend the market.”
“Prompted by fear about US sanctions, foreign holdings of Russian sovereign ruble debt have since declined to the lowest since 2016, and have handed investors a 12% loss since July, the fourth-worst performance among Russia’s peers tracked by Bloomberg. The share of non-residents in Russia’s ruble-denominated debt has fallen to 26-27%, according to Kolychev. That’s down from a peak of 34.5% in March and 28 percent in July, central bank data show.”
“On Wednesday, the Finance Ministry canceled a bond auction – the second time in recent weeks – amid rising borrowing costs. In another sign of increasing volatility, the governor of the Bank of Russia said policy makers at next week’s meeting will consider the first increase of the key interest rate since 2014 as inflationary risks grow due to the ruble’s weakness, which however appears to be at odds with what the Russian Prime Minister wants in a situation that is starting to looks similar to what is going on in Turkey.”
Cloggie on Thu, 6th Sep 2018 12:13 pm
Mak is right..There is no such thing as renewable’s, its just marketing..And you can’t transition transportation, it needs liquid fuels.Get a brain Moran! .
Another “useless” wind farm operational in the NorthSea:
https://www.bbc.com/news/uk-england-cumbria-45424559
Again, here an e-truck, making a mockery of the idea that you need “liquid fuel” to transport heavy loads.
Oh, and it is moron, not moran, you moron.
Cloggie on Thu, 6th Sep 2018 12:14 pm
https://www.youtube.com/watch?v=t8kZ7XX0-ms
The e-truck link
MASTERMIND on Thu, 6th Sep 2018 3:31 pm
Clogg
Batteries are too heavy to use for planes, trucks, and ships, commercially..A Tesla car battery weighs 1200 lbs, for example..
Sleepwalking Into The Next Oil Crisis
https://www.forbes.com/sites/rrapier/2018/03/23/is-the-world-sleepwalking-into-an-oil-crisis/#509edc8b44cf
MASTERMIND on Thu, 6th Sep 2018 3:32 pm
Charlottesville Jury Fines Man $1 for Punching White Nationalist
https://www.rollingstone.com/culture/culture-news/charlottesville-jury-dollar-fine-jason-kessler-white-nationalist-719985/
Its okay to punch a white nationalist!
Unleash the beast!
Cloggie on Thu, 6th Sep 2018 4:15 pm
“Batteries are too heavy to use for planes”
Where would we be without your grandiose insights!
https://youtu.be/Vr3dX2EClDg
Flying over the Alps, 4000m, 365 km, 43 kWk, 11 euro energy cost. 100% battery.
Cloggie on Thu, 6th Sep 2018 4:17 pm
“Its okay to punch a white nationalist!
Unleash the beast!”
Go for it millikike, (try to) kill all whites and see what happens next!
Antius on Thu, 6th Sep 2018 4:49 pm
Some oil-free freight transportation systems that could be scaled up in the future, taking freight off of the roads.
1) Underground freight networks.
http://www.lowtechmagazine.com/2008/02/a-world-without.html
The dominant design here appears to be small autonomous electric trains, running through steel or concrete pipes with carriages about 1m in diameter. These would transport goods between hubs in towns and cities.
Other lower tech options would be pneumatic and hydraulic pipeline systems. The first is useful over short distances, maybe linking city hubs to more local (district) freight yards. The second could be used to transport trains of floating freight containers over distances of hundreds of km or more. Basically, a canal within a steel pipe. Water transport of freight is relatively slow; maybe 10kph. But the energy cost is quite low and pumping can be provided by hydraulic accumulators, storing intermittent energy.
2) Aerial ropeways. These are good for transporting freight at low speeds over distances of hundreds of metres to perhaps 10km. Good for distribution of freight within towns and cities or within factories.
http://www.lowtechmagazine.com/2011/01/aerial-ropeways-automatic-cargo-transport.html
MASTERMIND on Thu, 6th Sep 2018 4:55 pm
Twitter permanently bans Alex Jones
https://www.usatoday.com/story/tech/2018/09/06/twitter-bans-alex-jones-and-his-conspiracy-site-infowars/1216107002/
MASTERMIND on Thu, 6th Sep 2018 4:58 pm
Clogg
Your fat sack of shit hero just go banned..His wife already left him recently..He should change his name to “IncelWars’..
There were zero girls at the alt right march..
LMFAO!
Antius on Thu, 6th Sep 2018 5:21 pm
Millimind, Alex Jones has his own website. He doesn’t need Twitter or Facebook.
Antius on Thu, 6th Sep 2018 5:31 pm
“Flying over the Alps, 4000m, 365 km, 43 kWk, 11 euro energy cost. 100% battery.”
Sweet. If this technology can be scaled up to provide intercity flights for perhaps a few hundred passengers per flight, it would reduce road congestion significantly.
Antius on Thu, 6th Sep 2018 5:46 pm
According to wiki, lithium ion batteries have energy density of around 0.7MJ per kg. Jet kerosene is 43MK/kg.
However, a DC electric motors is about 80% efficient, whereas a gas turbine is only 30% efficient. So, all other things being equal, an electric plane would have only about 5% of the range of an equivalent kerosene fuelled plane.
There is a market for relatively short range intercity flights that the electric plane could fill, especially in Europe. The complete absence of pollution would be a big selling point.
makati1 on Thu, 6th Sep 2018 6:26 pm
Techie dreamers alert! Attention!
How do you repair an asphalt road without asphalt? It takes one barrel of oil per square meter?
How do you feed the workers without FF fertilizers, pesticides, farm machines, processing and delivery, etc?
How do you do it all when the climate is changing and sun shine is unpredictable? Ditto for wind?
Cloggie, you have tight blinders, not open eyes and mind. I am old, but you seem to be senile? Logic says the ONLY renewable is sunlight, plants, and muscle power. All else is a techie dream. A future powered by tech is not going to happen. We will both be dead by 2050, but only a few decades ahead of humanity.
Antius on Thu, 6th Sep 2018 6:57 pm
“How do you repair an asphalt road without asphalt? It takes one barrel of oil per square meter?”
With concrete if needs be. But really, we need far less asphalt than we do gasoline to run the cars. We can afford to pay more for asphalt, as roads are not typically resurfaced more than once a decade.
“How do you feed the workers without FF fertilizers, pesticides, farm machines, processing and delivery, etc”
We need hydrogen and nitrogen to make fertilisers using the Haber process. The nitrogen is separated from cryogenic air; the hydrogen can come from electrolysis, biogas or fossil fuels. Again I would suggest that we can tolerate higher costs for the energy inputs to fertiliser than we can for transport.
For distribution, see my earlier post regarding freight transport. Farm equipment is actually easier to power using electric or compressed air than a road vehicle. With a cable drum, it could simply be powered from the mains.
There are non fossil solutions to all of our problems. What limits us more than anything else is a lack of lateral thinking.
MASTERMIND on Thu, 6th Sep 2018 7:33 pm
Mak
Humans can not live without illusions. For the men and woman of today, an irrational faith in progress may be the only antidote to nihilism. Without the hope that the future will be better than the past they could not go on.
-John N Gray
MASTERMIND on Thu, 6th Sep 2018 7:35 pm
Bankers And Tech Executives Know The Collapse Of Society Is Coming And Are Feverishly Prepping For It
http://theeconomiccollapseblog.com/archives/bankers-and-tech-executives-know-the-collapse-of-society-is-coming-and-are-feverishly-prepping-for-it
MASTERMIND on Thu, 6th Sep 2018 8:22 pm
Those folk are so stupid, their way of life is so dependent on other people (to a extent greater than the average person) i’m sure they will be amongst the first to go in such an event.
i’m talking to you billionaires that frequent here (you know i know who you are)
Duncan Idaho on Thu, 6th Sep 2018 9:15 pm
“Those folk are so stupid, their way of life is so dependent on other people”
Most are business people– smart enough for the con, but too stupid to realize the results.
If they were smarter, they would be doing something else.
Pat on Thu, 6th Sep 2018 10:12 pm
See $100 oil by November and $150 by end of year 2018. The oil is heading to levels of $300 by 2020 with worldwide shortages accelerating beginning 2018. Start Prepare bug out vehicles, ammo, water, food…….
Cloggie on Thu, 6th Sep 2018 10:43 pm
“Your fat sack of shit hero just go banned..His wife already left him recently..He should change his name to “IncelWars’..”
So what. Twitter openly flirts with the idea to ban Trump.
It is yet another clear sign of the gigantic rift in US society between the globalist left and the defenders of the old white republic.
This can only end terribly well… for Eurasia. Two billion Eurasians only need to wait until somebody in the US puts a little flame under this test tube, filled with oxygen and hydrogen and… “poof” says America.
Europeans, Russians and Chinese only secretly need to sit together somewhere in a nice and quiet place, without journalists around (Yalta?) and divide the Anglo loot among themselves… after the “break”, just like how Roosevelt, Stalin and sidekick Churchill divided the European loot (including UK) among themselves by the end of WW2 (1933-mission accomplished).
And how they intend to support the white insurgents, to ensure that Washington bites the dust, Berlin-style.
Cloggie on Thu, 6th Sep 2018 10:58 pm
“Cloggie, you have tight blinders, not open eyes and mind. I am old, but you seem to be senile? Logic says the ONLY renewable is sunlight, plants, and muscle power. All else is a techie dream. A future powered by tech is not going to happen. We will both be dead by 2050, but only a few decades ahead of humanity.”
You just make up that “logic”. Since the steam engine we had more than 2 centuries of “techie dreams” becoming reality, culminating in the moonlanding, tying the entire world together via the internet, and, and, and.
You seriously think folks are unable to tie rotors, panels and storage together in a new grid? I think you are projecting you despair with the loss of your home land, an attitude you share with most thinking North-Americans here, onto the future of humanity. The fact that the USSR collapsed had zero economic effect on the rest of the world and the roaring “it’s the economy stupid” nineties.
Won’t be very different with the immanent social and political collapse of the US and its vassals and the global geopolitical transformation from multicult towards a multi-polar identitarian world.
makati1 on Thu, 6th Sep 2018 10:59 pm
MM, Some of us can, and do, live without illusions. We are called realists. Look it up sometime.
makati1 on Thu, 6th Sep 2018 11:14 pm
Antius: “With concrete if needs be.”
You do know that a cubic yard of concrete takes the energy of a barrel of oil to produce and place? There is no amount of solar or wind that is gong to keep roads repaired, run the mines, the cement plants, smelt the metals for the machines, etc.
You do realize that the Us alone has some 2,700,000 miles of paved roads, not to mention hundreds of square miles of paved parking lots, concrete and asphalt?
And lets not get into the 15,000,000 plus TONS of fertilizer used ANNUALLY in the US. That is more than 30,000,000,000 pounds. About 80 pounds per capita.
“What limits us more than anything else is a lack of lateral thinking” No. What limits us is denial of reality. Renewables is sick joke on humanity, pushed by your kind on stupid people who do not/cannot think for themselves. Techies are just another form of drug pushers and deserve the fate coming to them.
makati1 on Thu, 6th Sep 2018 11:25 pm
“You seriously think folks are unable to tie rotors, panels and storage together in a new grid?”
Yes, cloggie, I do know that most people cannot even replace an outlet on the wall without calling an electrician. For most folks, electric is still magic. They know it is dangerous but they need it. That is all they know.
As for electronics, that is way out there in magic land. Not 1 in 100,000 have any idea how their PC, I-gadget, cell phone, or even their car’s GPS works. Not a clue.
Most cannot change the battery in their car or even know how the engine works. They never needed to know so it is not important. They can tell you the standing of their local sports team or the names of the current celebrities. THAT is life today.
You and I may know and understand how to do things because we grew up with them, but today’s sheeple have no clue. Ask Boat when was the last time he tuned up his car and see what answer you get. LOL
Davy on Fri, 7th Sep 2018 5:43 am
“WORKING ABROAD The Most Attractive Countries For The World’s Workers”
https://tinyurl.com/yanj3uuo
“In 2014, the U.S. was named the most popular work destination worldwide and it remains in top-position this year. 34 percent of the survey’s respondents said they would be willing to move to the U.S. for work reasons. In Europe, the UK was the most popular destination for foreign workers in 2014 but due to Brexit, it has now slipped down the ranking to fifth place overall. The UK has been replaced by Germany which comes second in the ranking with 26 percent of foreign workers considering it their most attractive potential destination. Given its meteoric economic rise, China is conspicuous by its absence from the list and the only Asian entry is Japan in tenth place.”
Davy on Fri, 7th Sep 2018 6:32 am
“Hellacious Forecasts for Florence”
https://tinyurl.com/y744n53t
Models are now predicting that Florence will threaten the U.S. East Coast as a major hurricane next week. We are still one week out. And should take any prediction at this time with a grain of salt. However, this is a concerning trend which we should continue to monitor. Climate change factors discussed RE increasing U.S. East Coast hurricane risks include much warmer than normal sea surface temperatures, lifting of deflecting troughs to the north, and fixed Jet Stream ridge patterns that, when they prevail across the U.S. East, enhance the potential for land-falling storms
Cloggie on Fri, 7th Sep 2018 7:00 am
“In 2014, the U.S. was named the most popular work destination worldwide and it remains in top-position this year. 34 percent of the survey’s respondents said they would be willing to move to the U.S. for work reasons.”
So true. How did Trump again describe the countries these willing workers originate from?
https://www.washingtonpost.com/politics/trump-attacks-protections-for-immigrants-from-shithole-countries-in-oval-office-meeting/2018/01/11/bfc0725c-f711-11e7-91af-31ac729add94_story.html
The last time that Europeans would consider to go to North-America in large numbers was in the fifties.
Good luck Davy with becoming a shithole country yourself. We can safely leave it to died-in-the-wool Marxists like you and millimind to turn a former first world country into a third world one.
Adios America!
#MakeAmericaDarkAgain
Davy on Fri, 7th Sep 2018 7:13 am
“Good luck Davy with becoming a shithole country yourself. We can safely leave it to died-in-the-wool Marxists like you and millimind to turn a former first world country into a third world one.”
Poor nederfraud, his Nederland did not even show up on the list and probably the reason he is fuming. Hard to argue with statistics but we are talking the board fraud here.
Davy on Fri, 7th Sep 2018 7:32 am
“Deutsche Bank’s Top Investor Selling Its Entire Stake Under Orders From China”
https://tinyurl.com/y9g5854s
“The sale will only add to pressure on Deutsche Bank, whose shares have slumped amid several unsuccessful turnaround efforts, and could act as a catalyst amid speculation that it may need to merge with another lender in the long run. As for HNA, the liquidation will mark the unwinding of one of the most high-profile investments made during a multi-year acquisition spree that cost the company tens of billions of dollars.”
Cloggie on Fri, 7th Sep 2018 9:17 am
“Poor nederfraud, his Nederland did not even show up on the list and probably the reason he is fuming. Hard to argue with statistics but we are talking the board fraud here.”
Nobody is argueing your statistics, just that it is NOT a reason to be pleased about.
Ever more puzzled why you voted for Trump in 2016. Probably you are going to correct your mistake and vote Dems later this year. After all there can never be enough willing third world workers coming to Murrica. Millimind will be proud of you again. Good goy.
Davy on Fri, 7th Sep 2018 9:30 am
You are puzzled because you are a fraud. I voted for Trump for one reason and that was Hillary Clinton. You knew that but you enjoy playing fraudulent social media type games.