the global oil market: critical drivers
TRANSCRIPT
Presented at:
CSIS Energy and National Security Program
By: Dr. Fereidun Fesharaki Chairman, FGE
15 October 2013
Washington, D.C.
This presentation material contains confidential and privileged information intended solely for FGE clients. The dissemination, distribution, or copying by any means whatsoever without FACTS Global Energy’s prior written consent is strictly prohibited.
The Global Oil Market: Critical Drivers
www.FGEnergy.com
2
Why are Oil Prices Stubbornly High? Global Supply Disruptions
0
1
2
3
4
mm
b/d
Iran South Sudan Nigeria Syria Yemen Libya
Nigeria Force Majeure: Bonny Light Usan Nembre Creek
Libya Uprising
Libya recent protests take total supply outage to over 3.5 mmb/d
Iran Sanctions
www.FGEnergy.com
60
70
80
90
100
110
120
130
140
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
J 11 F M A M J J A S O N D J 12 F M A M J J A S O N DJ 13 F M A M J J A
Dat
ed
Bre
nt,
US$
/bb
l
Sau
di P
rod
uct
ion
, mm
b/d
Saudi Production
Brent Price
Saudi Oil Output – Balancing the Market
3
Saudi comfort zone 8-10 mmb/d
www.FGEnergy.com
Five Key Oil Demand Growth Centers
4
(Year-on-year Oil Demand Growth, kb/d)
0100200300400500
2013 2014 2015
China
0100200300400500
2013 2014 2015
India
0100200300400500
2013 2014 2015
Middle East
0100200300400500
2013 2014 2015
Africa 0100200300400500
2013 2014 2015
Latin America 5
1
2
3 4
www.FGEnergy.com
Three Centers of Oil Demand Loss
5
(Total Oil Demand, mmb/d)
17
18
19
20
21
2007 2009 2011 2013 2015
USA
13
14
15
16
17
2007 2009 2011 2013 2015
Europe
2
3
4
5
6
2007 2009 2011 2013 2015
Japan
www.FGEnergy.com
Big Boys Driving Global Demand
6
www.FGEnergy.com
- main growth regions
Crude Production 2012-2017
7
3.0
3.5
4.0
4.5 Canada mmb/d
7.0
8.0
9.0
10.0
11.0 USA mmb/d
9.2
9.4
9.6
9.8
10.0 Africa mmb/d
10.2
10.4
10.6
10.8
11.0 Latin America mmb/d
23.0
24.0
25.0
26.0 Middle East mmb/d
7.9
8.0
8.1
8.2
8.3 Asia Pacific mmb/d
9.5
10.0
10.5
11.0 Russia mmb/d
2.5
3.0
3.5 Other FSU mmb/d
2.5
3.0
3.5
4.0 Europe mmb/d
www.FGEnergy.com
0
20
40
60
80
100
120
140
5
6
7
8
9
10
11
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
mm
b/d
US$
/bb
l
Dated Brent
Saudi Production
Why Crude Oil Prices are Likely to Fall Saudi Arabia’s difficulty in continuing to balance the market
Saudi “comfort zone”
8
www.FGEnergy.com
Long-Term Brent Oil Price Outlook
9
$-
$20
$40
$60
$80
$100
$120
$140
$160
US$
/bb
l
2012 are actual. Forecasts in $ 2013.
Ceiling - $120/bbl
Floor - $80/bbl
www.FGEnergy.com
4.2 mmb/d
NW Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU Africa NW
Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU
Africa NW
Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU
Africa
3.6 mmb/d 4.7 mmb/d
Distribution of Global Closures/ Run Cuts
PHASE I : 2008-2012 • Widespread cuts, but
Europe bears the brunt (40%)
PHASE II: 2013-2016 • OECD Asia biggest share:
Japan government plan, Australia + Philippines…
• Europe closures shift to Med
PHASE III: 2017-2020 • US leads cuts (demand,
crude infrastructure, LatAm) • Annual closures or run cuts
300-550 kb/d in 2016-20
Source: FGE World Refining Outlook 10
www.FGEnergy.com
-1,000
0
1,000
2,000
3,000kb/d Global Capacity Additions vs Demand Growth
Net CDUCapacity
NetProductDemand
-1,000
0
1,000
2,000
3,000
kb/d Excluding China, the Picture Looks Better Through 2016
Net CDUCapacity
NetProductDemand
11
Even with Closures, Global Refinery Capacity Additions Overwhelm Demand Growth
Thank You
Global Headquarters: 133 Aldersgate Street London, EC1A 4JA United Kingdom Tel: +44 (0) 20 7726 9570 [email protected]
Asian Headquarters: 8 Eu Tong Sen Street, #20-89/90 The Central, Singapore 059818 Tel: (65) 6222-0045 Fax: (65) 6222-0309 [email protected]
Global Offices: Dubai, UAE +971 (4) 439-0451 Beijing, PRC +86 (10) 5869-5737 Honolulu, US +1 (808) 944-3637 Perth, Australia +(61) 402-000-565 Tokyo, Japan [email protected] New York +1 (714) 593-0603 California +1 (646) 733-7571 Jakarta (62) 8111-831-127
London – Singapore – Dubai – Beijing – Hawaii – Perth – Tokyo – New York – California – Jakarta