Blue Quadrant Research Team 0 comments Market Commentary
Oil Market Recovery In Site
The International Energy Association (IEA) has reported in its most recent monthly Oil Market Report (OMR) for February, that global oil supply declined by 180,000 barrels per day (b/d) in February to 96.5mn b/d. More notably, the IEA also said that preliminary data for February suggested that OECD commercial inventories had declined during the month, marking the first such decline in just over a year. Furthermore, the IEA said it expected total non-OPEC supply to decline by 750,000 b/d in 2016, mainly driven by a decline of 530,000 b/d in the US market, as marginal shale producers cut back heavily on capital investment in new drilling programs.
Blue Quadrant Research Team 0 comments Market Insights
The US Energy Revolution
US oil and gas production is expected to increase significantly over the next five years due to the use of new technologies able to unlock vast previously inaccessible oil and gas (shale) reserve formations creating a US Energy Revolution.
Increasing US energy production and decreasing net energy imports have important implications for global US dollar liquidity going forward.
Increasing US oil and gas production may depress global energy prices, creating substantial risks for major ‘petrostates’. Inherent political vulnerabilities may be exposed, leading to heightened geopolitical risks and risk of major energy supply disruptions.
The current disparity in pricing between US natural gas prices and global gas- and oil prices will gradually be narrowed.