WORLD ENERGY NEWS OIL PRICES RALLY TO $80 IN MAY
U.S. IS THE WORLD’S LARGEST HYDROCARBON PRODUCER
There is a glow on the industry’s face and it’s coming from sustained higher oil prices that have turned the industry around from the dismal
It’s official. U.S. natural gas and petroleum hydrocarbon output
dive it suffered in 2015 and 2016. In May European benchmark Brent
exceed that of Russia or Saudi Arabia, powered by the industry’s
crude oil contracts for July traded in the $79-$80 per barrel range—a
robust recovery from the price downturn. For crude oil alone, the
far cry from the $50 per barrel range which felt almost unattainable two
U.S.A. produced just under 30 million barrels of oil equivalent per day
in 2017, which set an all-time record.
The Paris-based International Energy Agency (IEA) released its monthly
In the past ten years, America’s production of oil and gas has grown
Oil Market Report, analyzing the supply and demand situation: global oil
by almost 60%. The shale revolution has powered the most rapid
supply is finally falling to levels below global demand.
growth in U.S. oil and gas output since the 1950s, when the U.S. first began producing natural gas in large volumes. Read the story
In March 2018, OECD stocks declined by 27 million barrels to 2,819 million barrels – 214 million barrels below year-ago levels. This is the
at Oil & Gas 360.
lowest level in three years, the IEA said.
IRAN’S SHORT-LIVED OIL BOOM
Total DOE Crude Oil Inventory
Iran holds the world’s fourth-largest proved crude oil reserves and the
Week Ended May 18, 2018
world’s second-largest natural gas reserves durin, but during the past decade production has been suppressed by a lethal combination of
550,000 5-Yr historical range
international sanctions and underinvestment. According to the EIA,
the imposition of sanctions resulted in a near one million barrels per
Pre-Downturn 5 Year Average
day drop in crude oil and condensate exports in 2012.
Thousand Barrels (MBBL)
Then the Joint Comprehensive Plan of Action—the Iran nuclear
deal—lifted some energy related sanctions beginning in late 2015.
CRUDE OIL INVENTORY/’000 bbls
Current: 438,132 Actual Build/(Withdrawal): 5,778 Economist Average Estimate: (2,071) Previous: 432,354
In the absence of sanctions, according to an EIA report published in April 2018, Iran ranked among the world’s top 10 oil producers and top five natural gas producers. Iran produced almost 4.7 MMBPD of
w w w . e n e r c o m i n c . c o m
natural gas in 2017. 2-Feb-18
petroleum and other liquids in 2017, and an estimated 7.2 Tcf of dry 5-Jan-18
w w w . o i l a n d g a s 3 6 0 . c o m
But with the U.S. withdrawal from the Iran deal on May 8, 2018, Iran’s production numbers are destined to fall again, even after its
Crude oil prices have risen by nearly 75% since June 2017. But because of rising prices, the IEA lowered its estimate for 2018 global oil demand growth by 40 MBPD (forty thousand barrels per day) to 1.4 MMBPD (1.4 million barrels per day), and the agency has increased its expectations for U.S. oil production growth this year by 120 MBPD. The DOE’s total crude oil inventory has fallen to 432,354 MBBL – down 17% from the 520,772 MBBL that were in storage at this point last year. Read more about global crude oil inventories at Oil & Gas 360.
oil production had reached ~3.8 MMBOPD in 2017. What was the nuclear deal worth to Iran? The International Monetary Fund said that Iran’s oil and natural gas export revenue was $33.6 billion in 2015-2016 – having decreased nearly 40% from $55.4 billion in 2014-2015. In the wake of the U.S. withdrawal from the JCPOA, only a few international companies have partnered with Iran considering the renewed sanctions, and the outcome of previously announced projects in the country is up in the air. Read more about Iran’s temporary production jump at Oil & Gas 360.
38 ENERCOM360 M A G A Z I N E