OIL PRICES: Opec issues annual world outlook
Oil prices remained above the $70- a-barrel mark with traders shifting positions after US weekly oil statistics showed a surprise drop in fuel inventories, renewing concern about supply and offsetting an improvement in the outlook for Nigerian export operations.
After hitting an intra-day high of $72.25 on 18 June, the highest price since 28 August 2006, Brent crude was trading at $70.18 on 27 June, compared with $71.42 a week earlier. Confusion continued to surround the reopening of the UK/Dutch Shell Group's Forcados 400,000-barrel-a-day (b/d) terminal in Nigeria with some analysts suggesting operations could restart as early as July, with others saying renewed violence would continue to hamper the restoration of operations.
Analysts also turned their attention to Opec's annual world oil outlook, which presents its long-term view of the global trends in the oil market to 2030.
The Opec secretariat expects world consumption of petroleum and other liquids to grow by 34 million b/d by 2030 to reach 118 million b/d, broadly in line with the expectation held by both the International Energy Agency and the US' Energy Information Administration. Opec says developing countries are set to account for the bulk of the rise, with their demand forecast to double over the period to 58 million b/d in 2030 from 29 million b/d in 2005.
Investment bank Barclays Capital says that, with major forecasters sharing a fairly uniform view on the future path for oil demand growth, the question becomes how the supply side will meet incremental demand.
Conventional non-Opec supplies are expected to reach a plateau around 2010 and then begin a gradual decline from 2020 onwards.
'The obvious consequence of such a trend is to markedly lift the contribution of Opec oil to global supplies after 2010, especially as non-conventional production from non-Opec producers continues to play a minor role,' says Barclays Capital.
Opec crude production is forecast to average 30.2 million b/d in 2010, which is 900,000 b/d below the level of 2005, but will then increase with the major surge in output projected to come after 2015. In the downstream sector, Opec notes while many projects have been announced, few are set to start up before 2009, with most of the potential additions planned for the period 2010-12.
'Moreover, significant capital cost increases, limited availability of skilled labour and complicated procedures for construction permits and environmental restrictions create substantial project risks,' Barclays Capital adds.
Oil prices remained above the $70- a-barrel mark with traders shifting positions after US weekly oil statistics showed a surprise drop in fuel inventories, renewing concern about supply and offsetting an improvement in the outlook for Nigerian export operations.
After hitting an intra-day high of $72.25 on 18 June, the highest price since 28 August 2006, Brent crude was trading at $70.18 on 27 June, compared with $71.42 a week earlier. Confusion continued to surround the reopening of the UK/Dutch Shell Group's Forcados 400,000-barrel-a-day (b/d) terminal in Nigeria with some analysts suggesting operations could restart as early as July, with others saying renewed violence would continue to hamper the restoration of operations. Analysts also turned their attention to Opec's annual world oil outlook, which presents its long-term view of the global trends in the oil market to 2030. The Opec secretariat expects world consumption of petroleum and other liquids to grow by 34 million b/d by 2030 to reach 118 million b/d, broadly in line with the expectation held by both the International Energy Agency and the US' Energy Information Administration. Opec says developing countries are set to account for the bulk of the rise, with their demand forecast to double over the period to 58 million b/d in 2030 from 29 million b/d in 2005. Investment bank Barclays Capital says that, with major forecasters sharing a fairly uniform view on the future path for oil demand growth, the question becomes how the supply side will meet incremental demand. Conventional non-Opec supplies are expected to reach a plateau around 2010 and then begin a gradual decline from 2020 onwards. 'The obvious consequence of such a trend is to markedly lift the contribution of Opec oil to global supplies after 2010, especially as non-conventional production from non-Opec producers continues to play a minor role,' says Barclays Capital. Opec crude production is forecast to average 30.2 million b/d in 2010, which is 900,000 b/d below the level of 2005, but will then increase with the major surge in output projected to come after 2015. In the downstream sector, Opec notes while many projects have been announced, few are set to start up before 2009, with most of the potential additions planned for the period 2010-12. 'Moreover, significant capital cost increases, limited availability of skilled labour and complicated procedures for construction permits and environmental restrictions create substantial project risks,' Barclays Capital adds.This content is only available to full MEED package subscribers (MEED magazine and MEED.com).
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