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IEA Medium-Term Oil Market Report: 2015

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The recent oil market sell off, brought on by deep imbalances after years of record-high prices, will likely prove a milestone in the history of oil. However prices eventually evolve, markets may never be the same. This edition of the Medium-Term Oil Market Report sizes up the magnitude of this transformation so far and sketches the oil landscape at the 2020 horizon.

It is not just oil price signals that have changed, but also the market’s responsiveness to them. On the supply side, this Report’s forecast reflects not just lower price assumptions, but also the high price-sensitivity of US light tight oil compared with conventional crude, as well as OPEC’s embrace of market forces in late 2014 in a bid for market share. On the demand front, it shows how the response to lower prices will differ in a low-growth, deflationary environment compared to a higher-growth one.

Not all factors can be easily predicted. Much hangs on the outcome of talks between Iran and the “P5+1”, on Islamist violence in oil-producing countries, and on future relations between Russia and the West. Such geopolitical risk factors are themselves a defining feature of the oil market for the medium term.

As in previous editions, this Report also offers key projections of global refining capacity, crude trade flows and product supply, this year with special focus on the impact of changing bunker fuel legislation.

Rarely has the oil market faced changes as sweeping as today. That makes the insights from the IEA Medium-Term Oil Market Report 2015 all the more timely and valuable.

http://www.iea.org/bookshop/702-Medium-Term_Oil_Market_Report_2015

Is oil consumption going to swell?

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Global oil demand revised up in the recent IEA report that is fastest pace in five years(12 August 2015).

“Oil includes crude oil, condensates, natural gas liquids, refinery feedstocks and additives, other hydrocarbons (including emulsified oils, synthetic crude oil, mineral oils extracted from bituminous minerals such as oil shale, bituminous sand and oils from CTL and GTL) and petroleum products (refinery gas, ethane, LPG, aviation gasoline, motor gasoline, jet fuels, kerosene, gas/diesel oil, heavy fuel oil, naphtha, white spirit, lubricants, bitumen, paraffin waxes and petroleum coke).”

Global oil demand in 2015 is expected to grow by 1.6 million barrels per day (mb/d), up 0.2 mb/d from the previous IEA Oil Market Report and the fastest pace in five years, the IEA Oil Market Report for August informed subscribers, as economic growth solidifies and consumers respond to lower oil prices. Persistent macro-economic strength supports above-trend growth of 1.4 mb/d in 2016.

World oil supply fell nearly 0.6 mb/d in July, mainly on lower non-OPEC output. OPEC crude production held steady near a three-year high. As lower prices and spending cuts take a toll, non-OPEC supply growth is expected to slow sharply from a 2014 record of 2.4 mb/d to 1.1 mb/d this year and then contract by 200 000 barrels per day (200 kb/d) in 2016.

OPEC crude supply inched 15 kb/d lower in July to 31.79 mb/d as Saudi output eased and offset record high Iraqi production and increased Iranian flows. The “call on OPEC crude and stock change” rises to 30.8 mb/d in 2016, up 1.4 mb/d on this year, due to a stronger demand outlook and stalling non-OPEC supply growth.

OECD inventories rose counter-seasonally by 9.9 mb to hit another all-time high of 2 916 mb in June, with their surplus to average levels widening to a record 210 mb. As the seasonal restocking of “other products” continued apace, refined products by end-month covered 31.3 mb days of forward demand, 0.2 days above end-May.

Global refinery runs reached a record 80.6 mb/d in July, 3.2 mb/d up on a year earlier, but fissures are showing. High distillate stocks have pushed cracks in Singapore down to their lowest level since 2009 and prompted run cuts in Asia. Elsewhere, especially in the US, still-soaring gasoline cracks supported high margins and throughput.

The August Oil Market Report also features a detailed look at cuts in capital expenditure by oil majors as well as in-depth analysis of North American producers’ priorities. It also analyses the likely effect of the Iran nuclear deal on output and whether the supply-demand balance in gasoline markets is actually as tight as the recent price spread spike might suggest. The full report is available for public view here.

[The Oil Market Report (OMR) is a monthly International Energy Agency publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead. To subscribe, click here]

http://www.iea.org/newsroomandevents/news/2015/august/iea-releases-oil-market-report-for-august.html

Oil: 2015

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oil2015 With 2014 data.

A comprehensive reference book on current developments in oil supply and demand. The first part of this publication contains key data on world production, trade, prices and consumption of major oil product groups, with time series back to the early 1970s.

The second part gives a more detailed and comprehensive picture of oil supply, demand, trade, production and consumption by end-user for each OECD country individually and for the OECD regions.

Trade data are reported extensively by origin and destination.

Oil Information is one of a series of annual IEA statistical publications on major energy sources; other reports are Coal Information, Electricity InformationNatural Gas Information and Renewables Information.

Download here a free excerpt of the publication.
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The CD-ROM and on-line service contain detailed time series from 1960 (1971 for some countries) to 2014. End-use data are available up to 2013.


To order the on-line data service and find further information of coverage please consult http://data.iea.org

http://www.iea.org/bookshop/664-Oil_Information_2015

Russian Tectonic Preferential Shift to Asian Energy Market

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“Moscow and Beijing are moving towards the formation of a strategic energy alliance… Chinese companies have joined gas projects on the Russian Arctic shelf and the Sakhalin shelf” Russian President Vladimir Putin said.

Chinese thirst for Russian energy has been growing non-stop and increased by 20 percent over the past summer. In this context, the Great Hall of the People, Beijing, witnessed the historic sign of a memorandum of strategic cooperation between Gazprom and China National Petroleum Corporation during a recent visit of President Vladimir Putin to China. It extends their collaboration not only in the supply of oil and gas but also post services and various other areas. The recent memorandum consolidates their strategic cooperation and initially applicable to the next five years. 

In May, 2014, Russia and China have made a breakthrough in the gas supply through the ‘Power of Siberia’ deal. It  plans to supply 38 billion cubic meters of gas via ‘eastern’ route for the next thirty years. This time, Sakhalin would be the energy resource base to supply gas from the Far East- ‘Power of Sineria-2’. However, the total volume and timing of this new supply chain is yet to be decided. All these developments show the resolve of Russian pivot to Asia, where current oil market is not posing serious threats to the Russian intentions as mentioned in a Bloomberg survey, while China is a priority partner in the Arctic region for Russian moves. However, it does not mean there is no problem at all.

World Energy Outlook Special Report 2015: Energy and Climate Change

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The world is moving towards a crucial climate change meeting in Paris in December 2015 (COP21). The negotiations there will be based on national pledges, formally known as Intended Nationally Determined Contributions, with the goal of setting the world on a sustainable path.

The International Energy Agency has long emphasised to its members and the world at large that energy production and use which is not compatible with international environmental requirements is not sustainable: it fails the test of energy security. The IEA, therefore, feels an obligation to make a contribution to COP21 – a contribution which reconciles climate and energy needs. That is the purpose of this special report in the World Energy Outlook series.

The report:

  • Presents a detailed first assessment of the energy sector impact of known and signalled national climate pledges for COP21.
  • Proposes a bridging strategy to deliver a near-term peak in global energy-related greenhouse-gas emissions, based on five pragmatic measures that can advance climate goals through the energy sector without blunting economic growth.
  • Highlights the urgent need to accelerate the development of emerging technologies that are, ultimately, essential to transforming the global energy system into one that is consistent with the world’s climate goals.
  • Recommends four key pillars on which COP21 can build success, from an energy sector perspective.

Download Executive Summaries and Report: Download publication