report of McKinsey Energy International expects a large growth in
deep-water oil production projects next year, which will increase the
world's oil supply by more than 500,000 barrels per day by 2022,
revealing that this increase in new supplies will not Would be sufficient to address the expected supply gap in the coming years due to the earlier contraction of investment.
international report suggested that the current relative slowdown in
oil prices would lead to a rise of around $ 70 a barrel between 2022 and
2024. It would then restart the efforts of producers to rebalance
supply and demand, A level of between 60 and 65 dollars a barrel in the long term.
The international report - which is highly reliable - confirmed that
the decline in international oil prices in the past years led to a rapid
decline in the number of oil projects, especially with regard to the
final investment decisions, but the current investment situation is much
better as the signs of recovery are beginning to show again.
According to the report, despite the current recovery, oil flows are
expected to be much lower than in previous years, noting that markets
will remain in supply shrinks in the next three to
report said crude prices would rise to $ 70 per barrel in the medium
term, adding that rising prices would revive deep-water projects,
leading to global oil output growth, but the market would still struggle
to address the supply gap with demand as it is expected to witness Demand is accelerating significantly in the coming years, not accompanied by growth in supply at the same pace.
report pointed that the reduction of investments in upstream
projects is likely to lead to a shortfall in oil supply, pointing out
that the global investments in oil upstream projects suffered
significant reductions because of the low oil prices environment, which
in turn led to a decline in the growth of oil supplies to International level.
report highlighted the decline in capital expenditure in oil and gas
projects from $ 800 billion in 2014 to $ 400 billion in 2016. Global
spending on exploration and evaluation activities fell 40 percent to $
11.2 billion between 2014 and 2016, Many investment decisions in 2016 have already occurred in 2014, before the current recovery in 2017 occurs.
The International Report said that the International Investment
Management figures and figures show good signs of an investment recovery
in 2017, especially with respect to smaller, less capital-intensive
projects that have already entered the starting stage.
However, economic estimates suggest that the reduction of large and
large investment spending will lead to a 50-60 percent reduction in new
projects over the next three to five years compared with the average
oil projects in the years 2010-2014.
to the international report, the decline in investment and contraction
of production is expected to contribute to the narrowing of the markets
over the next two years, stressing that production of new projects that
entered into production after 2014 is not enough to address the expected
gap in supply levels of oil , Pointing that in fact, the process of filling this gap will come
more than 60 percent of the new production of producers outside OPEC
from the projects that have taken their investment decisions and started
production before 2014.
The report, which specializes in research on traditional energy
investment issues, said deepwater projects could provide an increase in
global oil output, but would struggle to address the projected supply
gap due to overall investment contraction.
Deepwater projects boost global supplies as their projects approved in
2017 achieve larger supply volumes after recovering from the
difficulties, severe downturns and constraints imposed on them as prices
fall in 2014, the report said.
Many projects, particularly deepwater, have succeeded in squeezing
costs to overcome low oil prices. The worst years of stagnation in deep
water projects are 2016, before market conditions improve in 2017, the
At the same time, smaller deepwater projects suffered a minor setback
with 19 projects falling in 2016 and 2017 compared to 22 in 2014,
according to the report.
international report said that despite the downward trend in investment
in platforms, it tends to be the most powerful and most
effective productivity, especially after the success of efforts to raise
production efficiency and achieve a lot of cost savings, which fell at
the price of the parity from over $ 50 a barrel to the level of about 40
Dollars per barrel.
the other hand, in terms of prices at the end of last week, oil prices
rose to the highest level of settlement in October amid news of optimism
about the strength of the Chinese demand in addition to the decision of
US President Donald Trump not to recognize that Iran complies with the
nuclear agreement and other tensions In the Middle East.
Brent futures rose 92 cents, or 1.6 percent, to $ 57.17 a barrel,
while US crude rose 85 cents, or 1.7 percent, to $ 51.45 a barrel.
The two contracts were placed at the highest settlement level since
September 29, and during the week Brent crude rose nearly 3 per cent
while US crude rose more than 4 per cent.
China's oil imports totaled 9 million bpd last month, the data
showed, with average imports averaging 8.5 million bpd between January
and September, boosting China's position as the world's largest oil
prices have been bolstered by tensions in Iraq, which have increased
since the Kurds voted in favor of independence on Sept. 25, and Kosirt
Rasul, deputy head of the Kurdistan region of Iraq, said Kurdish
authorities sent reinforcements of thousands of troops to the Kirkuk oil
region to address "threats" from the central government Iraq.
For its part, US energy companies cut the number of working oil
excavators for the second week in a row to continue to decline drilling
activities continued for two months despite the rise in crude prices
above $ 50 a barrel.
Companies cut the number of oil drilling platforms by five in the
week ending October 13 to a total of 743, the lowest since early June,
Baker Hughes said.
The number of rigs, an early indicator of future production, is
still larger than 432 excavators that were operating a year ago after
energy companies boosted spending plans earlier this year as they
expected higher crude prices in the coming months.
Some exploration and production companies trimmed their 2017
investment plans over the past few months after crude prices fell below $
50 a barrel in May, but are still planning to spend more money this
year than last year.
The US Energy Information Administration reported that crude oil
inventories in the United States fell last week as refiners increased
production while gasoline stocks rose and distillate stocks fell.
Crude stocks fell 2.7 million barrels in the week ending October
6, compared with analysts' expectations of a 2 million barrel drop.
"Crude inventories at the Cushing's futures delivery center in Oklahoma
increased 1.3 million barrels to 63.78 million barrels," the department
Refinery consumption rose from 229,000 barrels per day (bpd), with
operating rates up 1.1 percentage points. Gasoline inventories rose 2.5
million barrels compared to analysts' forecasts of a drop of 480,000
Data from the Energy Information Administration showed distillate
stocks, including diesel and heating oil, fell 1.5 million barrels
against a forecast of 2.2 million barrels, and US crude oil imports last
week fell 1.1 million barrels per day to 6.35 million barrels.
production is expected to rise to 9.2 million bpd in 2017 and to a
record low of 9.9 million bpd in 2018 from 8.9 million bpd in 2016. The
International Energy Agency expects US crude production to grow by
470,000 barrels per day this year and 1.1 million bpd In 2018.
The Energy Agency forecast that commercial oil inventories fell in
the third quarter of this year, the second decline since the collapse
of the price of crude in 2014, thanks to the decline in the quantities
of oil in floating or movable stocks.
The Organization of Economic Co-operation and Development (OECD)'s
trade inventories in August fell 14.2 million barrels to 3.015 billion
barrels, bringing the surplus level to 170 million barrels over the
supply remained unchanged in September at 32.65 million barrels per
day, but fell 400,000 barrels a day from a year ago, which means that
the Organization's commitment to cut output by 1.2 million bpd was 88
percent last month and 86 percent since the beginning of the year, agency.
agreed with its partners, including Russia, Oman and Kazakhstan, to cut
production by 1.8 million barrels per day until March next year. "There
is no doubt that major producers have renewed their commitment to do
everything necessary to strengthen the market and support the long
rebalancing process, much has been done towards rebalancing the market, but building on this success in 2018 will require continued discipline.