After seeing massive growth so far this decade, natural gas liquids (NGLs) are expected to rise by about 1.2 million barrels in the next five years. Despite the increase in NGLs, a key source of supply for petchems, a global oil supply gap could still form early next decade.
OPEC’s strategy centers around restricting supply to the Atlantic basin since inventory data in the U.S. is the most timely and visible in the world. From February to early April, U.S. imports from Saudi Arabia have plummeted by about 462,000 b/d.
The economic calamity in Venezuela is having a ripple effect on the oil market, altering long-standing trade flows and hollowing out the country’s oil-producing assets.
Similar to other Gulf producers, UAE and Qatar are making efforts toward the twin goals of reducing expensive fuel subsidy programs and diversifying exports through larger natural gas volumes.
Small independent shale producers are dealing with a the possibility of another oil price plunge with aggressive hedging, a development that should allow output to grow.
A large stock build in the first quarter, rampant producer hedging, and large amount of investor inflows in the futures market created an “unbalancing of the market,” the opposite of OPEC’s stated goal, according to one prominent oil market analyst.
If oil demand were to peak, the industry would likely see a good bit of consolidation, but the situation would not bring about a collapse.
The market’s initial reaction on Monday and its losses of about $7 since the beginning of March indicate that OPEC members can’t use verbal intervention to lift prices as easily as they did last year.
The myriad issues that Angola is struggling with right now, including declining production and weak prices, reflect the challenges ahead for Isabel dos Santos and the country’s oil industry.
Sharp growth in the downstream sector could simply shift the gigantic surplus of crude to the refined products market, undermining profit margins in all regions.