07-26-2015, 12:37 PM (This post was last modified: 07-26-2015, 12:38 PM by Stavros.)
The BP Outlook is interesting reading Putz.
And surely will turn out to be wrong.
Essentially ALL forecasts turn out to be wrong when they are time-specific ... be they predictions of energy supply/demand/pricing, or currency exchange rates, or FED Interest Rates, or corn production, or whether the weather will be sunny or rainy.
Take a look at the attached US Department of Energy - International Energy Outlook 2010 to see how today's situatuon is different than what was predicted in 2010.
To my opinion the pendulum will swing back to tight oil/gas supplies and higher-than-predicted demand by 2020.
If a pundit says "I predict there will be a Recession" or "I predict the Market will drop 20%" he will most likely EVENTUALLY be correct. If he predicts the S&P 500 price at the end of each month for the next five years he will most likely be wrong.
I think that this change in the slope of china's commodity use is real. I thought the part about pipe lined NG versus LNG export expansion was worth noting. It appears that LNG is where most of the NG growth will be.
Yes I predict the Bengals will win the Superbowl,but I would add on to this prediction within the next 50 years. In 1970's Newsweek had a whole magazine dedicated to the ice age returning because of two cold winters in a row. Predicting energy prices is about the same not exactly a science. Just need a little war in the middle east, more catastrophic weather or earthquakes, saudi's turn around and tighten supply for some political reasons or even a technological advance in getting it out of the ground even cheaper. The Chinese economy turns around and India needs more power for a few billion people. And if I remember correctly when oil prices were heading to $100 per barrel they were saying the speculators were pushing up the market pricing. So it can be manipulated as well. You have as good a chance predicting the price in five years as picking number 7 on the roulette wheel.
My point is that forecasts are interesting to read, especially the ones from BP, ExxonMobil, Shell and TOTAL who have a lot of $kin in the game and make their decisions based on the forecasts they develop. In fact, while BP says 2035 will see ~350 MTPA production, TOTAL says 373 MTPA.) ... http://www.total.com/en/energies-experti...g-industry
The industry consensus right now is that energy demand growth will reduce in the coming years (NOT demand, just demand GROWTH); hence supply growth will be managed accordingly. If demand growth exceeds forecast, then energy will be in short supply by 2022.
Don't let the gloom and doom stories scare y'all. A 1% growth in crude oil demand means all the increased supply from Iran in 2H 2016 will be soaked up by the increase in global demand.
Another thing to remember is that up to 30% of crude oil is refined and used as feedstock to produce petrochemicals. Historically, petrochemical demand growth is GDP + 1-2%. When the current worldwide recession is over (YES we've been in one for the past 6+ months) you'll see GDP's go up across the board and oil price will go up.
