Douglas Westwood: Shale is no Threat to Deepwater

Marinelink.com
Monday, January 06, 2014

Prodigious US shale oil production is often treated as a threat to deepwater.

 

Won’t all this oil swamp demand? Many investment banks and government agencies forecasting oil markets feel that it could. The evidence, however, suggests differently. We have contended that the world is short of oil, and this shortage, rather than changes in habits or demographics, is driving decreasing oil consumption in the advanced countries. If the oil supply increases, then any overhang will be quickly absorbed. And that’s what the record shows: US product supplied (effectively, US oil demand) reached 20 mbpd in the last four weeks, up a whopping 1 mbpd (5.3%) from the same period last year.  High oil prices have been aggressively suppressing demand in the advanced economies (and, to be fair, in the emerging economies as well). But if prices drop—as gasoline prices did in the US through much of November—demand comes roaring back to life.
 
But will it be enough to offset supply growth? Consider: US shales posted a blow-out year to November 2013, rising by 1.3 mbpd (three month average). The Canadians added nearly another 0.7 mbpd, according to the EIA, for North American production growth of an astounding 1.9 mbpd. And Brent oil prices have recently increased by a few dollars to $111 / barrel.  In the coming twelve months, substantial production growth is expected. Part of this is fuelled by continued North American unconventionals growth of 1.3 mbpd.  
 
Should we worry? There may be soft patches in the year ahead, but expect any excess supply to rapidly find a home, with prices returning to recent levels in a few months. Shales are no threat to deepwater.
 
Analysis provided by Steven Kopits, Douglas-Westwood, New York

 

Maritime Reporter January 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

The 2nd Ballast Water Management Summit

Sign-up for this year’s most in-depth exchange of information and best venue for BWT stakeholders to network and meet their regulatory peers is underway.   Infocast’s

BP Freezes Pay in 2015 to Cut Costs

BP is freezing base pay across the group this year, the latest in a series of steps by oil majors to cut costs in response to sinking oil prices.   Over the past year,

Study Examines Impacts of Inland Waterway Investment

The National Waterways Foundation (NWF) has commissioned and released a two-year study to examine the U.S. inland waterways’ national economic return on investment

Energy

Britain to Ban Fracking in National Parks

Britain said on Monday it would ban fracking in national parks, reversing a policy announced last year, in a concession to the opposition Labour Party which had

Libya Forces Tanker Away from Supplying Rival Government

Libya's recognized government said it forced a tanker from delivering fuel to its rival administration, diverting the vessel to its own territory by threatening an air attack on it.

BP Freezes Pay in 2015 to Cut Costs

BP is freezing base pay across the group this year, the latest in a series of steps by oil majors to cut costs in response to sinking oil prices.   Over the past year,

Offshore Energy

World's Largest Ship Sparks Outrage

Jewish groups in the Netherlands and Britain have reacted with rage and despair at the arrival in Rotterdam of the world's biggest ship, the Pieter Schelte, named

Hofste, Montijn Nominated to Supervisory Board Fugro

Fugro N.V. announces that the Supervisory Board of Fugro nominates Mrs. P.H.M. Hofsté and Mrs. A.H. Montijn for appointment as members of the Supervisory Board

Technip Certified to EDGE Standard

Technip and EDGE Certified Foundation announce today that Technip in Brazil, in France and in Italy, including flexible pipe manufacturing plants in Brazil and France and Group’s headquarters,

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Naval Architecture Navigation Pod Propulsion Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1806 sec (6 req/sec)