Americas News
ESAI Energy: Oil Glut Will Last Until 2018
ESAI Energy LLC (ESAI Energy) has predicted in its Medium and Long-term Global Oil Outlook briefing that the current oil glut will not be fully rebalanced until 2018.
According to ESAI Energy, global fuel oil demand growth was steady at around 1.7 million barrels per day (bpd) during 2010 to 2013, but almost halved in 2014 to 900,000 bpd.
But demand growth is expected to recover in the short term, stimulated by low prices, and then slow down again.
On the supply side, a slowing of the pace of non-OPEC production growth is expected to bring balance back to oil markets.
"Taking into account differing responses to low oil prices in the U.S., Canada, Latin America and Africa, global supply growth will decelerate," said ESAI Energy.
"After growing 2.3 million b/d, non-OPEC supply growth will slow to 1.2 million b/d in 2015, 900,000 b/d in 2016-2017, then slow further for the rest of the decade."
The predictions are based on OPEC production remaining at around 30 million bpd in the meantime, and crude oil prices are expected to remain under pressure.
"Obviously there are a lot of potential geopolitical threats to oil supply that could accelerate the return to a balanced market, but absent unexpected supply interruptions, a rebalancing of the market will be a slow process," said Sarah Emerson, Principal at ESAI Energy.
In January, Total's CEO said that oil prices could hit $200 per barrel within five years as oil companies slash investments, hampering future supply capacity.
