Potential Shortage of Global Oil Supplies in 3 Years

The prospect of a US interest rate increase is also impacting oil prices as it would likely boost the dollar and make dollar-denominated commodities like oil more expensive for holders of other currencies.

He also said Moscow was not mulling membership in the Organization of Petroleum Exporting Countries (OPEC) but cooperation with the oil cartel “has proved to be vital and prudent”.

On the flipside, a possible extension of the deal – assuming compliance is high and cheating is low – would give more confidence to the USA drillers to increase output at higher oil prices. “That’s a long time in this market”.

“The mood will be different this year”.

Oil leaders from around the world gathered in Houston Tuesday to talk about the industry’s path forward.

In the same period, American oil men led by the late George Mitchell (the Father of Fracking) have unlocked vast stores of oil and natural gas that had been hitherto locked in shale rock.

The comments of Khalid al-Falih at the CERAWeek by IHS Markit conference stood in stark contrast to those of his predecessor at the same venue a year ago.

Azerbaijan, an energy-rich Caspian country, has presented its data on daily oil output for February 2017 to the OPEC Monitoring Committee. Aramco recently ended its partnership with Royal Dutch Shell Plc to take complete control of Motiva Enterprises LLC, which owns the largest refinery in the USA and 24 distribution terminals along the Gulf Coast. The major problem to Saudi Arabia and his band of OPEC brothers is the rise in U.S. Oil Rigs. One of the biggest questions in the oil market is how quickly and how much shale producers will boost output. While expectations of a tighter market and better compliance on the output cuts supported prices on the lower side, rising U.S. production weighed on the upside. Baker Hughes reported an increase in the number of drilling rigs added by USA drillers last week. The U.S. land drilling rig count is up 55 percent in the past 12 months, and many of them are in the Permian.

Oil’s resurgence isn’t confined to America.

The deal will end at the end of the first half of this year.

As the best resources are developed and less productive areas in the United States are tapped – and as input costs such as steel, labor and sand increase – the economics of new wells again will deteriorate, according to IEA.

Novak also said Russian Federation is negotiating the issue of daily purchases of 100,000 barrels of oil from Iran, and the sides are “discussing the terms” of the potential agreement.

India’s energy minister announced a new round of bidding for upstream and downstream investments on Monday.

“Oil is range-bound. If prices dip below $50 a barrel, OPEC will cut more; if it goes above $55 the US will produce more”, said Jonathan Barratt, chief investment officer at Ayers Alliance in Sydney.

US crude futures ticked up 0.1% to $53.25 a barrel, while Brent crude was flat at $55.99. Expectations for US LTO are higher than last year’s forecast thanks to productivity gains.

Birol emphasized that oil demand will not peak anytime soon, despite numerous reports that fuel efficiency standards and alternative vehicles will slow growth and ultimately cause consumption to decline.