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

Finance

Charleston Harbor Deepening Gets US Funding

Charleston Harbor deepening project earns key federal funding for preconstruction engineering and design; U.S. Army Corps of Engineers allocates $1.303 million

Chinese PM Inks 2 Agreements During CMA CGM Visit

The CMA CGM Group hosted the Chinese Prime Minister, the French Foreign Affairs Minister and a ministerial delegation at its headquarters in Marseilles, July 1, the global shipping company announced.

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Energy

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

GTT Records Order for 2 LNG Tankers

GTT receives a new order from Hyundai Samho Heavy Industries for two LNGCs for Teekay   GTT, a designer of membrane containment systems for the maritime transportation

Bahri to Buy Five More Oil Tankers from Hyundai Heavy

National Shipping Company of Saudi Arabia (Bahri) has signed a deal to buy a further five very large crude tankers from ship builder Hyundai Heavy Industries, the

Offshore Energy

Shell Green Lights GoM Field After Cost Cuts

Royal Dutch Shell has given the green light for the development of its largest platform in the Gulf of Mexico after making steep cost cuts which made the deep water

Statoil to Suspend Saipem Rig Contract

Norwegian oil major Statoil said on Wednesday it will suspend a rig contract with Italy's Saipem due to overcapacity in its rig portfolio. The suspension of

Monopiles Terminal to Be Built in Rotterdam

Sif and Verbrugge to build terminal for offshore wind energy on Maasvlakte 2   Sif Group, Verbrugge International and the Port of Rotterdam Authority have signed

 
 
Maritime Contracts Maritime Security Maritime Standards Naval Architecture Offshore Oil Pod Propulsion Ship Repair Ship Simulators Sonar Winch
rss | archive | history | articles | privacy | 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: 0.1474 sec (7 req/sec)