[Tanada]

IEA sees the end of the glut in sight.

$this->bbcode_second_pass_quote('', 'L')ONDON (Reuters) - World oil demand will grow more than expected this year, helping to ease a global glut despite rising production from North America and weak OPEC compliance with output cuts, the International Energy Agency said on Friday.

The agency raised its 2017 demand growth forecast to 1.5 million barrels per day (bpd) from 1.4 million bpd in its previous monthly report and said it expected demand to expand by a further 1.4 million bpd next year.

"Producers should find encouragement from demand, which is growing year-on-year more strongly than first thought," said the Paris-based IEA, which advises industrialized nations on energy policy.

"There would be more confidence that rebalancing is here to stay if some producers party to the output agreements were not, just as they are gaining the upper hand, showing signs of weakening their resolve," the IEA said.

The Organization of the Petroleum Exporting Countries is curbing output by about 1.2 million bpd, while Russia and other non-OPEC producers are cutting a further 600,000 bpd until March 2018 to help support oil prices.

The IEA said OPEC's compliance with the cuts in July had fallen to 75 percent, the lowest since the cuts began in January.

It cited weak compliance by Algeria, Iraq and the United Arab Emirates.

In addition, OPEC member Libya, which is currently exempt from the output cuts, steeply increased output.

As a result, the overall global oil supply rose by 520,000 bpd in July to stand 500,000 bpd above year-ago levels.

Adding to the challenges of oil producers to support oil prices is rising non-OPEC output, which is expected to expand by 0.7 million bpd in 2017 and by 1.4 million bpd in 2018 on strong gains in the United States, which is not participating in the output caps.

Still, strong global demand growth is helping to clear excess barrels with the IEA registering a decline in stocks in industrialized nations in both June and July.

Stocks remain 219 million barrels above a 5-year average - a level that OPEC is targeting with its output cuts.

The IEA also revised historic demand data for 2015-2016 for developing countries, cutting it by 0.2-0.4 million bpd.

As a result of those historic revisions, the IEA cut baseline demand figures for 2017-2018 by around 0.3-0.4 million bpd and hence lowered demand for OPEC crude by the same amount.

"The impact of carrying this lower demand base into 2017 against unchanged supply numbers is that stock draws later in the year are likely to be lower than first thought," the IEA said.

Changes mainly happened as the IEA revised down historic demand data for Indonesia, Malaysia and Iran while revising up India and keeping China largely unchanged.

Reporting by Dmitry Zhdannikov; editing by Dale Hudson and Jason Neely

[asg70]

I'm looking forward to the glut ending and prices going up so the ETP zealots will have their day of reckoning.

[ROCKMAN]

"Producers should find encouragement from demand, which is growing year-on-year more strongly than first thought,"

So let's follow the logic: For 2016, the IEA extricated worldwide average demand of was almost 96 million barrels of oil. It also notes the average price of oil that year was $45/bbl.

The IEA notes demand in 2013 was 90.6 million bopd and prices were $90+/bbl.

So demand from 2013 thru 2016 increased 5.4 million bopd and prices fell about 50%. Ya know, it almost seems as if oil prices are not determined by demand. In fact, at least in recent years, demand has been determined by the price of oil.

Wow! Do ya think oil demand might actually decrease if oil prices increase significantly? That seems contrary to the IEA's expectations that future oil demand increases will happen as oil prices increase.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'S')o demand from 2013 thru 2016 increased 5.4 million bopd and prices fell about 50%. Ya know, it almost seems as if oil prices are not determined by demand. In fact, at least in recent years, demand has been determined by the price of oil.

[Subjectivist]

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;Producers should find encouragement from demand, which is growing year-on-year more strongly than first thought,"

So let's follow the logic: For 2016, the IEA extricated worldwide average demand of was almost 96 million barrels of oil. It also notes the average price of oil that year was $45/bbl.

The IEA notes demand in 2013 was 90.6 million bopd and prices were $90+/bbl.

So demand from 2013 thru 2016 increased 5.4 million bopd and prices fell about 50%. Ya know, it almost seems as if oil prices are not determined by demand. In fact, at least in recent years, demand has been determined by the price of oil.

Wow! Do ya think oil demand might actually decrease if oil prices increase significantly? That seems contrary to the IEA's expectations that future oil demand increases will happen as oil prices increase.

[AdamB]

$this->bbcode_second_pass_quote('shortonsense', '')$this->bbcode_second_pass_quote('Bas', 'W')ooooohoooo!!!


And to think I had the impression they were becoming more pessimistic in recent years, how wrong I was...

[AdamB]

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('shortonsense', '')$this->bbcode_second_pass_quote('Bas', 'W')ooooohoooo!!!


And to think I had the impression they were becoming more pessimistic in recent years, how wrong I was...

[AdamB]

$this->bbcode_second_pass_quote('shortonsense', '')$this->bbcode_second_pass_quote('Cloud9', 'G')ood to know I have been worried about nothing.

[AdamB]

$this->bbcode_second_pass_quote('shortonsense', '
')
And now, with quite reasonable fuel prices since the summer of 2008, what is coming up next? Why, PHEV's and EV's to the regular consumer. And what else? Why...the wind generated electrical capacity to power them.

[AdamB]

$this->bbcode_second_pass_quote('rangerone314', 'H')oorah! 9 trillion barrels left...

So when does oil production rise to 90 million barrels?

[AdamB]

$this->bbcode_second_pass_quote('TonyPrep', '')$this->bbcode_second_pass_quote('shortonsense', 'G')ood thing I specialize in science and critical thinking

[AdamB]

$this->bbcode_second_pass_quote('', '
')
Production
This week, the IEA said that U.S. shale would dominate the oil and gas markets over the next decade, rising to “a level 50 percent higher than any other country has ever managed.” With a “remarkable ability to unlock new resources cost-effectively,” U.S. shale will add millions of barrels of new oil supply by 2025.

[Subjectivist]

Could be. The thing is near everyone seems to be saying the same thing.

The financial experts all seem to buy in to the same projections.

I think the problem is the boom was so fast and so high it provided the illusion that you just need to inject money and fracking will deliver more oil. Those of us who were around here in 2013 watching were already seeing that a lot of the fracking wells completed in 2013-2015 were of lower quality than average. Granted from mid 2015 to now the quality is way up, but that is because with low prices there is no way to make back the cost with low production wells at $40/bbl.

[dissident]

$this->bbcode_second_pass_quote('pstarr', '&')quot;This week, the IEA said that U.S. shale would dominate the oil and gas markets over the next decade, rising to “a level 50 percent higher than any other country has ever managed."

Actually IEA's estimate is reasonable. It might have said 100 percent higher? Or even 1,000 percent . . . as no other country produces and markets oil (in meaningful amounts) from tight shale using horizontal fracting methods like the US. It appears we are the only ones with disposable income to afford Eau D'Bakken for our tanks.

[onlooker]

Absolutely , they are overestimating
Shale bubble
http://shalebubble.org/

[AdamB]

$this->bbcode_second_pass_quote('onlooker', 'A')bsolutely , they are overestimating
Shale bubble
http://shalebubble.org/

[AdamB]

$this->bbcode_second_pass_quote('', ' ')
The rise in global oil production, led by the United States, is likely to outpace growth in demand this year, the International Energy Agency said on Tuesday. The Paris-based IEA raised its forecast for oil demand growth in 2018 to 1.4 million barrels per day, from a previous projection of 1.3 million bpd, after the International Monetary Fund upped its estimate of global economic growth for this year and next. Oil demand grew at a rate of 1.6 million bpd in 2017, the IEA said in its monthly market report. However, the rapid rise in output, particularly in the United States, could well outweigh any pick-up in demand and begin to push up global oil inventories, which are now within sight of their five-year average. "Today, having cut costs dramatically, U.S. producers are enjoying a second wave of growth so extraordinary that in 2018

[Plantagenet]

The EIA is also predicting that US shale oil production will grow for at least the next 20 years and won't peak until the 2040s

EIA predicts US shale oil production to peak in the 2040s

They sure are optimistic over there at the EIA.

Cheers!

[Subjectivist]

$this->bbcode_second_pass_quote('', 'W')hat the past decade can tell us about the future of coal



As we prepare to publish the tenth edition of the IEA’s annual market report on coal on 18 December, it seemed a worthwhile moment to take stock of the key developments that have had an impact on global coal markets over the past decade and consider what they might tell us about coal’s future role in the broader energy system.

Between 2009 and 2019, global coal consumption grew by an average of about 1% per year to reach 7.6 billion tonnes, but its share of the world’s primary energy supply declined from 28% to 26% over the same period. And its share of electricity generation fell from 40% to 36.5%.

From today’s perspective – as efforts increase around the world to accelerate clean energy transitions and reduce emissions from carbon-intensive fuels like coal – the past ten years look like a period in which global coal demand remained stubbornly high. Within the coal industry, however, it is a decade that fell short of initial high expectations. For example, the CEO of a major US coal producer was quoted by the Wall Street Journal in February 2011 as saying, “I actually think that the next decade for coal is going to be one of the best ever.”



There was a lot of momentum behind coal demand growth at that time. The 2000s had seen the largest growth in coal demand in history – greater than the previous four decades combined. China accounted for 85% of the global growth in coal consumption, which it needed to power its rapidly growing industrial economy and build its infrastructure. At that time, expectations that China’s coal demand would keep growing appeared reasonable. And India – another country with a population of over 1 billion people and a reliance on coal – had the potential to take up the slack as Chinese demand growth slowed.

Yet demand for coal in 2019 was lower than in 2013. Coal’s growth prospects were undermined by changes in China’s economic structure and growth, the shale revolution in the United States, the rapid rise of wind and solar PV, and the widespread adoption of policies to fight climate change.

China is now responsible for half of the world’s production and consumption of coal, but it is no longer a major source of demand growth. In fact, Chinese coal consumption stopped growing after 2013, thanks to efforts to diversify its energy mix, reduce reliance on coal and shift towards a less energy-intensive economy. While India’s coal consumption growth in the 2010s has been strong, it is still an order of magnitude below China’s during the 2000s.

The shale revolution in the United States unleashed a formidable competitor to coal – natural gas. Low gas prices have squeezed US coal demand more than any other factor. In 2009, coal’s share in the US power mix was 45%, with gas at 23%. By 2019, coal’s share had fallen to 24%, while gas now accounted for 38% of power generation.

LNG exports have spread the effects of the shale revolution beyond the United States, driving down international gas prices. The combination of lower gas prices and carbon pricing in Europe resulted in a similar decline for coal there. In 2009, coal’s share in the EU power mix was 31% compared with 16% for gas. In 2019, coal was down to 15%, and gas was up to 22%. Interestingly, after the closure of nuclear power plants across Japan following the massive earthquake and tsunami that hit the country’s northeast coast in 2011, the resulting increase in demand for natural gas drove up global LNG prices. European power utilities responded by using less gas and more coal for about two years until gas prices came back down.



The other revolution affecting coal in the power sector was the spectacular growth of wind and solar PV. Ten years ago, wind and solar power were taking off thanks to strong policy support. Technological developments, learning-by-doing and lower costs of capital have together brought down the cost of renewables dramatically since then, taking them from subsidised niche markets to the mainstream. Based on solar PV’s extremely competitive costs, the IEA expects it to become the “new king” of world electricity markets, driving rapid growth of renewable power over the next decade.

Climate policies are the third factor that has contributed to coal’s loss of momentum. After the disappointment at COP15 in Copenhagen in 2009, many observers questioned the ability of world leaders to agree on efforts to tackle CO2 emissions. However, the Paris Agreement reached at COP21 in 2015 was a historical milestone in which virtually all countries supported more ambitious climate targets. Since then, climate policies have gained a lot of impetus, influencing the decisions of investors and companies. Public opposition to fossil fuels has spread, and a growing number of shareholders are pushing companies’ executives to reduce exposure to fossil fuels, particularly coal. An increasing number of G20 countries are pledging to be carbon-neutral by mid-century.