Oil Cover

Oil Market Snapshot – March 2015

  • Brent’s stabilisation last month at an average of $58.10/bbl proved short-lived, averaging $53.89/bbl before Saudi Arabia bombed Yemen causing a rebound
  • Our demand growth forecast for 2015 remains broadly unchanged at 1 million b/d; albeit 2016 has been trimmed to 1.24 million b/d (-0.13 million b/d) due to EIA’s downward GDP revisions
  • We expect an oil demand rebound in OECD, while non-OECD demand growth will slow mainly due to Western sanctions on Russia and economic slowdown in China
  • We see GDP growth in India and Indonesia partially offsetting China
  • OPEC production remains high, with Saudi Arabia’s at a record high, but we believe non-OPEC production growth is likely curbed at c. 150,000 b/d or less in 2015
  • IEA’s non-OPEC production forecast has not yet considered fall in US rig count and China’s production cuts (-600,000 b/d) – upside risk to prices
  • Progress in the P5+1 nuclear negotiations with Iran may provide downward pressure on prices and support OPEC’s drive for market share
  • Despite cost pressures, Big Oil remains invested in deepwater, cost optimisation and tax cuts could raise attractiveness of mature areas such as the North Sea
  • The US Gulf of Mexico remains robust, seeing strong interest for deep- and ultra-deepwater blocks in the recent bidding round
  • US LTO sees a wave of consolidations begin with the Bakken’s biggest producer Whiting up for sale, Quicksilver bankrupt, and Statoil looking to expand

Please purchase or subscribe to this report to continue reading or log in if you have already done so.

Not yet a subscriber?
Subscribe and Save 20%

If you are interested in a corporate subscription, please contact us at admin@petrologica.com or call us on +44(0)1206 823 295.