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Last Updated: January 26, 2017
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EIA estimates that crude oil and other liquids inventories grew by 2.0 million barrels per day (b/d) in the fourth quarter of 2016, driven by an increase in production and a significant, but seasonal, drop in consumption. Global production and consumption are both projected to increase through 2018, but consumption is expected to increase at a faster rate than production. As a result, global balances are expected to tighten.


The production increase in the fourth quarter of 2016 largely reflects members of the Organization of the Petroleum Exporting Countries (OPEC) ramping up production in advance of implementing the November agreement on production cuts. Global production is expected to have increased by 1.6 million b/d in the fourth quarter of 2016, with OPEC accounting for 0.9 million b/d, or 55%, of this increase. EIA estimates that total global production averaged 96.4 million b/d in 2016. Global production is expected to increase to 97.5 million b/d in 2017 and to 98.9 million b/d in 2018.


The large seasonal consumption declines in the fourth quarter of 2016 are not expected to continue as global consumption of petroleum and liquids is forecast to grow at a faster rate than production through 2018. Annual petroleum and liquids consumption for 2016 is estimated at 95.6 million b/d and is forecast to increase to 97.2 million b/d in 2017 and 98.7 million b/d in 2018. On a quarterly basis, consumption is expected to be greater than production in the third quarter of both 2017 and 2018, leading to stock draws in both periods.


Global inventories are expected to have increased an average of 0.9 million b/d in 2016. The January 2017 Short-Term Energy Outlook forecasts annual crude oil balances to tighten over the next two years, with 2017 averaging a 0.3 million b/d stock build and 2018 averaging a 0.1 million b/d stock build. By the second half of 2018, inventories are expected to decline by an average of 0.1 million b/d.


With annual inventory builds, along with a lack of a significant draw on existing inventories, prices remain below $60/b through the end of 2018. Brent crude oil spot prices are expected to remain fairly flat during 2017, in part as a result of the responsiveness of U.S. tight oil production to rising oil prices in late 2016, and they are expected to average $53/b for the year. EIA forecasts Brent prices will slowly increase in 2018, beginning the year at $54/b in January and ending the year at $59/b in December, averaging $56/b annually.

graph of monthly Brent crude oil price, as explained in the article text
Source: U.S. Energy Information Administration, Short-Term Energy Outlook, January 2017

Principal contributor: Matthew French

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Forecasting Bangladesh Tyre Market | Zulker Naeen

Tyre market in Bangladesh is forecasted to grow at over 9% until 2020 on the back of growth in automobile sales, advancements in public infrastructure, and development-seeking government policies.

The government has emphasized on the road infrastructure of the country, which has been instrumental in driving vehicle sales in the country.

The tyre market reached Tk 4,750 crore last year, up from about Tk 4,000 crore in 2017, according to market insiders.

The commercial vehicle tyre segment dominates this industry with around 80% of the market share. At least 1.5 lakh pieces of tyres in the segment were sold in 2018.

In the commercial vehicle tyre segment, the MRF's market share is 30%. Apollo controls 5% of the segment, Birla 10%, CEAT 3%, and Hankook 1%. The rest 51% is controlled by non-branded Chinese tyres.

However, Bangladesh mostly lacks in tyre manufacturing setups, which leads to tyre imports from other countries as the only feasible option to meet the demand. The company largely imports tyre from China, India, Indonesia, Thailand and Japan.

Automobile and tyre sales in Bangladesh are expected to grow with the rising in purchasing power of people as well as growing investments and joint ventures of foreign market players. The country might become the exporting destination for global tyre manufacturers.

Several global tyre giants have also expressed interest in making significant investments by setting up their manufacturing units in the country.

This reflects an opportunity for local companies to set up an indigenous manufacturing base in Bangladesh and also enables foreign players to set up their localized production facilities to capture a significant market.

It can be said that, the rise in automobile sales, improvement in public infrastructure, and growth in purchasing power to drive the tyre market over the next five years.

January, 18 2019
Your Weekly Update: 14 - 18 January 2019

Market Watch

Headline crude prices for the week beginning 14 January 2019 – Brent: US$61/b; WTI: US$51/b

  • After a rally, crude oil prices took a breather at the start of this week, as the market moved from a bullish mood to a cautious one as slowing Chinese trade data spooked the market
  • The US government shutdown – now the longest ever in history – continues with no end in sight, with Republicans and President Donald Trump at a stalemate with energised Democrats
  • That ended a week-long rally that allowed crude oil to bounce back from sub-US$50/b levels in December over OPEC+’s implementation of a new deal to shrink supplies and Saudi Arabia’s promise to ‘do more if needed’
  • Even Russia, which showed some reluctance in implementing a speedy cut, has made strides in reducing output, releasing data that showed that production fell by 30,000 b/d in December and is on track for a decrease of 50,000 b/d in January relative to October levels
  • However, the OPEC+ group is now reportedly struggling to set a date for their next meeting, where the supply deal will be reviewed; the review is set for April, ahead of OPEC’s usual Vienna meeting in June/July, but an April review is necessary to assess the expiration of American waivers on Iranian crude
  • Some downside to price trends is that the waivers on Iranian crude exports have nullified the impact of American sanctions; both Turkey and India have recently resumed imports of Iranian crude after a brief hiatus, with India electing to pay for all its crude in rupees
  • Although WTI prices have improved, American drillers are still reticent to add sites, wary of changing market conditions; Baker Hughes indicates that the active American drill count was flat last week, with the loss of 4 oil rigs offset by a gain of 4 gas ones
  • Crude price outlook: Upward momentum should continue with crude price this week, but at a more gradual pace, as fears of a slowing global economy weigh on the market. Brent should stay in the US$61-63/b range and WTI in the US$52-54/b range


Headlines of the week

Upstream

  • BP is proceeding with a major US$1.3 billion expansion of the Atlantis Phase 3 in the Gulf of Mexico, aimed at adding 38,000 b/d of additional output
  • Venezuela has announced plans to remap its Caribbean oil and gas prospects, a move that potentially puts it on collision course with ExxonMobil over the country’s long-disputed borders with the now oil-rich Guyana
  • New seismic studies at BP have identified a billion more barrels of oil in place at the deepwater Thunder Horse platform in the Gulf of Mexico
  • Saudi Arabia has published an updated figure of its oil reserves – its first in 40 years – pegging total volumes at 268.5 billion barrels
  • Norway has cut its crude production forecast, predicting the output will be 1.42 mmb/d in 2019, the lowest level since 1988
  • BP is reportedly looking to sell its 28% stake in the North Sea Shearwater assets to offset its recent US$10.6 billion acquisition of US shale fields
  • The Unity fields in South Sudan have resumed production, after being halted for five years over a civil war, with initial production targeted at 20,000 b/d
  • Eni and Thailand’s PTTEP have secured exploration rights to an oil and gas concession in Abu Dhabi, with Adnoc participating at 60% if oil is struck
  • TransCanada Corp – ahead of name change to TC Energy – is planning to start construction on the controversial Keystone XL oil pipeline in June, even in the face of continued social and legal setbacks
  • Spirit Energy’s Oda field in the Norwegian North Sea has received permission from the Norwegian Petroleum Directorate to start up
  • Aker Energy has completed successful appraisal of the offshore Pecan field in Ghana, estimating some 450-550 mmboe of resources in place
  • Shell and BP have submitted plans to begin exploratory drilling in Brazil’s Pau Brasil and Saturno pre-salt areas in early 2020

Downstream

  • Saudi Arabia has reiterated plans to build a US$10 billion oil refinery in Pakistan’s deepwater port of Gwadar, part of the larger China-Pakistan Economic Corridor plan that is part of the Belt and Road initiative
  • Shell Chemicals has started up its fourth alpha olefins unit at in Geismar, Louisiana, adding 425,000 tpa of capacity to a new total of 1.3 mtpa
  • After being idled over the paralysis between PDVSA and ConocoPhillips, the 335,000 b/d Isla refinery in Curacao has restarted, with operations likely to shift from PDVSA to Saudi Aramco’s Motiva US refining subsidiary

Natural Gas/LNG

  • After seemingly receiving official go-ahead from all levels of government and even indigenous groups, Shell’s US$31 billion Kitimat LNG project in Canada has now been blockaded by a group of protesting First Nation holdouts
  • Completion of major LNG projects in Australia’s west coast have allowed its LNG exports to increase by 23% in 2018, with greater growth expected in 2019
  • The NordStream 2, long championed by German Chancellor Angela Merkel, now faces new opposition in Germany over Russian global political interference – which could result in the controversial pipeline being delayed or cancelled
  • Shell has completed its acquisition of a 26% stake in the Hazira LNG and port venture in India from Total, bringing its equity interest to full ownership
  • BP has announced plans to drill six new exploration wells in Azerbaijan by 2020, hoping to strike a new natural gas play to rival its giant Shah Deniz field
January, 18 2019
Latest issue of GEO ExPro magazine covers geoscience and oil and gas activity focusing on Frontier Exploration and the Gulf of Mexico

GEO ExPro Vol. 15, No. 6 was published on 10th December 2018 bringing light to the latest science and technology activity in the global geoscience community within the oil, gas and energy sector.

This issue focusses on frontier exploration, downhole acquisition tools and how we can collaboratively increase the efficiency of the exploration and production of oil, gas and energy resources. With a geographical focus on the Gulf of Mexico, this issue provides a lesson on the carbonate geology of the Florida Keys and details coverage of newly improved tectonic restorations of the US and Mexican conjugate margins which have enabled enhanced mega-regional hydrocarbon play and reservoir fairway maps of the region.

You can download the PDF of GEO ExPro magazine for FREE and sign up to GEO ExPro’s weekly updates and online exclusives to receive the latest articles direct to your inbox.

To access the latest issue, please visit: https://www.geoexpro.com/magazine/vol-15-no-6


January, 17 2019