In-depth reports on key Oil market.
Wed, 08 July 2015
A general improvement in oil demand and slowdown in the rate of growth in US shale oil output combined to push prices up 13 percent, quarter-on-quarter, in Q2 2015. US oil production is estimated to have fallen by 4 percent, in Q2 2015, year-on-year. Increases from OPEC and non-OPEC sources, however, will ensure that global oil balances remain in surplus throughout 2015. As a result we see full year Brent crude oil averaging $61 per barrel. Domestically, Saudi crude consumption will reach 3mbpd in Q3 2015, as domestic demand peaks due to the summer months. In the last three years, quarter-on-quarter growth in Q3 has averaged 250 thousand barrels per day, and we expect to see a similar quarterly rise in total crude consumption this year as well.Download pdf
Wed, 08 April 2015
The widening of global oil surplus to 2 million barrels per day (mbpd) led to Brent prices dropping by 29 percent, quarter-on-quarter, to $54 per barrel in Q1 2015. Oil markets will continue to see large surpluses in Q2 & Q3 2015. As a result we see full year Brent crude now averaging $61 per barrel in 2015. Domestically, we estimate total Saudi oil consumption will rise to 2.7mbpd in 2015 as the latest Saudi refinery, Yasref, reaches full capacity, with rises in gas output limiting some growth of crude consumption in the domestic energy mix. This means we now project Saudi production rising to 9.8mbpd in 2015, up from 9.6mbpd in our previous forecast. The combination of higher oil output and lower prices will affect the macroeconomic outlook for the Kingdom. Real GDP in the Kingdom is likely to benefit from higher oil output while fiscal and external balances are expected to remain in deficits.
Thu, 29 January 2015
Global oil balances will increase in Q1 2015 as oil demand remains subdued but oil supply continues to expand from the US, Russia and Iraq. All of this will maintain pressure on oil prices in the first quarter. Beyond Q1 2015 we see prices recovering, with a sharper rebound in H2 2015, due to a group of factors. Regardless of lower price environment, Saudi Arabia’s strategy is clearly to maintain market share in key export countries and, as a result, we see production falling only slightly in the next two years. We project full year average production in 2015 at 9.6 mbpd, declining to 9.4 mbpd in 2016.Download pdf
Wed, 01 October 2014
In Q3 2014 oil prices dropped by 7.3 percent to an average of $102 per barrel. We believe this was due to a combination of accelerating US supply, weaker than expected global demand, stabilization in geopolitics, and an appreciation of the dollar. Oil prices will recover slightly in Q4 2014 but ample supply from non-OPEC sources will prevent prices from rising too far beyond $100 per barrel, unless there is a significant deterioration in geopolitics in Iraq, Libya or Russia/Ukraine. We expect Saudi production to 9.5 mbpd in Q4 2014, resulting in 9.7 mbpd average for 2014. In 2015, as the global economy recovers and oil demand picks up, we see Saudi production averaging 9.6 mbpd.Download pdf
Mon, 21 July 2014
Global oil demand in Q2 2014 increased by 1 million barrels per day (mbpd) year-on-year, whilst falls in OPEC production saw global supply limited to increases of 0.4 mbpd, year-on-year. Non-OPEC supply will exceed global demand growth in 2014 but geopolitical events will prevent any sustained fall in oil prices. As a result, we have revised our Brent oil forecasts upwards from $105 per barrel previously, to an average of $109 per barrel for 2014. We have also revised our Saudi crude production forecasts upwards to 9.7 mbpd for 2014, from 9.4 mbpd previously.Download pdf
Tue, 10 April 2012
Oil markets have been tight so far this year, with prices and Saudi production above our expectations. We have revised up our forecasts for both, meaning that oil revenues will be at a record level in 2012.Download pdf