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Gold/Mining/Energy : Copper Fox -- Ignore unavailable to you. Want to Upgrade?

To: louel who wrote (9692)

11/10/2015 12:38:20 PM

From: Metacomet

1 Recommendation

Recommended By
biggerbob68

Read Replies (1) | Respond to of 10654

Oil glut to swamp demand until 2020

oil market will remain oversupplied until the end of the decade as an unstoppable push for cleaner fuels and greater efficiency offsets the effect of lower prices, the world’s leading energy forecaster said.

Oil glut to swamp demand until 2020
Anjli Raval, Oil and Gas Correspondent

The oil market will remain oversupplied until the end of the decade as an unstoppable push for cleaner fuels and greater efficiency offsets the effect of lower prices, the world’s leading energy forecaster said.

In its closely watched annual outlook, the International Energy Agency said oil demand would rise by less than 1 per cent a year between now and 2020, a slower pace than necessary to quickly mop up an oil glut that has driven prices to multiyear lows.

The slowdown in oil demand growth follows a near 15-year surge in consumption, driven by the rapid industrialisation of China and other emerging market economies. But Beijing is now moving away from dirtier fuels and to less energy-intensive growth as it heads towards a more consumer-led economy.

“We are approaching the end of the single largest demand growth story in energy history,” Fatih Birol, executive director of the IEA, told the Financial Times. Mr Birol was appointed IEA head in September after 20 years with the west’s energy watchdog.

“Demand is not as strong as we have seen in the past as a result of efficiency [and climate] policies [globally],” he added, saying the growth in renewables will further restrict demand for oil.

The IEA does not expect crude oil to reach $80 a barrel until 2020 under its “central scenario”, as excess supplies are slowly soaked up. After 2020, oil demand growth is expected to grind almost to a halt, increasing just 5 per cent over the next 20 years, the IEA said.

The IEA forecasts oil demand will not hit 103.5m b/d until 2040 — it is currently 94.5m b/d. Growth will be “moderated” by a return to higher prices, efforts to phase out subsidies and the switch to alternative fuels — especially in developed markets.

“Collectively, the United States, EU and Japan see their oil demand drop by around 10m b/d by 2040,” the report said.

Pledges made in advance of the Paris climate talks in December, Mr Birol said, would be a further catalyst in the move towards a low carbon and energy efficient future.

Although global energy needs are rising and $630bn in investment is needed annually, “big energy companies are underestimating the effects of all of these things on the demand side”, Mr Birol said.

The IEA chief said a prolonged period of lower oil prices could not be ruled out. In this “low oil price” scenario, the agency said prices would stay close to $50 a barrel until the end of the decade and would not rise to $85 until 2040.

The collapse in Brent crude — from $115 a barrel in June 2014 to below $50 — has battered the budgets of producer countries and forced the world’s biggest oil companies to slash investment. Brent, the global benchmark, rose 45 cents in afternoon trading to $47.66 a barrel.

After years of oil above $100 a barrel, the “lower for longer” mantra has become part of the industry lexicon, promoted by traders, bankers and even the IEA itself as global inventories swell and storage fills up. The global oil market remains oversupplied by at least 1m barrels a day.

Since November, production outside the Opec cartel from countries such as the US has taken a hit. But it has been far more resilient than expected. Meanwhile, production from the cartel — led by Saudi Arabia and Iraq — has increased, helping to keep prices low. The IEA said “a clear pathway” had opened for additional Iranian barrels.

Saudi officials warned this week that investment cuts and oil prices at about $50 for a prolonged time would have a “substantial and long-lasting” impact on future oil supplies and could lead to a price spike. The IEA also made this case in an alternative “scenario”.

But forecasting long-term oil prices is notoriously difficult. Just two years ago, the IEA had said that, although the rise of US shale oil would “shake” the energy world, a period of oversupply did not await.

To: louel who wrote (9692)	12/11/2015 8:27:32 AM
From: Metacomet	2 Recommendations Recommended By biggerbob68 Slushie Read Replies (1) \| Respond to of 10654

..more death knell for bitumen, it ain't cheap and it's land locked I reckon Teck's gamble in the oil sands will be worth about what Elmer's is in Arizona ..they just had a larger treasury to piss away when they too ignored what was happening in the world.. Oil Falls to Lowest Since 2008 as OPEC Seen Fueling Supply Glut Oil declined to the lowest level since 2008 in London amid estimates that OPEC’s decision to effectively scrap production targets will keep the market oversupplied. Brent futures declined as much as 2.1 percent for a sixth consecutive loss. The global surplus will persist at least until late 2016 as demand growth slows and the Organization of Petroleum Exporting Countries shows “ renewed determination” to maximize production, the International Energy Agency said Friday. The group chose not to curb output at its Dec. 4 meeting. Oil prices have slumped to levels last seen during the global financial crisis as a result of OPEC’s strategy to defend market share against higher-cost producers. The group’s production rose to a three-year high in November, it said in a report Thursday, as surging Iraqi volumes more than offset a pullback by Saudi Arabia. “Too much oil is being produced at the moment,” analysts at Commerzbank AG led by Eugen Weinberg in Frankfurt said in a report. “There is unlikely to be any kind of ‘happy ending’ for oil prices this year.” OPEC SupplyBrent for January settlement declined as much as 83 cents to $38.90 a barrel on the London-based ICE Futures Europe exchange, the lowest since Dec. 31, 2008, and traded for $39.13 a barrel at 11:42 a.m. local time. It has decreased 9.2 percent this week. The European benchmark crude was at a premium of $2.82 to WTI. West Texas Intermediate for January delivery was at $36.32 a barrel on the New York Mercantile Exchange, down 44 cents. The contract dropped 40 cents to $36.76 on Thursday, the lowest close since February 2009. The volume of all futures traded was about 29 percent above the 100-day average. OPEC is displaying hardened resolve to maintain sales volumes even as prices fall in an oversupplied market, the IEA said Friday in its monthly report. While its policy is hitting rivals, triggering the steepest drop in non-OPEC supply since 1992, world oil inventories will likely swell further once Iran restores exports on the completion of a deal to lift sanctions, it said. bloomberg.com