Two things are certain in 2018 in the oil markets. In June, OPEC will convene in Vienna where it will announce that the global oil markets are almost in balance, outlining an exit strategy where the 14 country block and the Russia-led NOPEC block will eliminate strict targets but agree to a rough cap for total production. By December 2018, there will be no restrictions beyond market forces on the supply side. After agreeing to limit itself for the good of the market for more than two years, major OPEC countries will be eager to unshackle themselves for a variety of reasons – Saudi Arabia has the Aramco IPO to worry about, Iraq wants to make up for lost time, Iran needs to circumvent American sanctions, Venezuela is at risk of default, while Nigeria desperately needs to restructure its economy.
The wildcard in this scenario is US shale producers. It was thought that many would rush in the fill the gap left by OPEC this year. That has happened to some extent – crude from Eagle Ford and the Permian has made it far and wide, from South Korea to Sweden, some destinations for the very first time – but the wave has been smaller than thought. Burnt by the last time they unrestrainedly raised output, American shale producers are focusing more on optimisation and returning value to shareholders this time round, as crude oil prices went north of US$55/b and have been staying steady there. The wave, however, will slowly rise. US crude production is expected by the EIA to rise to rise to 9.9 mmb/d, rising from 9.3 mmb/d in 2017, which was already a record high.
So OPEC is backing off and American producers are cautiously raising production. What does this mean for prices? A look at the futures markets indicate some bullishness, with the net long positions rising. Supporting this is the growth in global oil demand – which is expected to be solid if unspectacular in 2018, but enough to support average crude prices of US$60/b. Recent wounds should prevent oil from falling below US$50/b, as drillers and explorers value caution over aggression. The main variable is US shale production. Some predict a 2018 increase of as much as 1.3 mmb/d, while the more careful, like the IEA, think growth will be closer to 800 kb/d. There is reason to believe that diminishing returns could be kicking in technological in America’s major shale basins, but there is still a lot of room to grow. Exactly how much it grows will be the major variable for prices. That’s difficult to predict; as shale producers are too numerous to predict collectively. But this much is certain - in 2018, the value of oil will not be decided in Vienna, but in Texas.
Key oil forecasts for 2018
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Already, lubricant players have established their footholds here in Bangladesh, with international brands.
However, the situation is being tough as too many brands entered in this market. So, it is clear, the lubricants brands are struggling to sustain their market shares.
For this reason, we recommend an impression of “Lubricants shelf” to evaluate your brand visibility, which can a key indicator of the market shares of the existing brands.
Every retailer shop has different display shelves and the sellers place different product cans for the end-users. By nature, the sellers have the sole control of those shelves for the preferred product cans.The idea of “Lubricants shelf” may give the marketer an impression, how to penetrate in this competitive market.
The well-known lubricants brands automatically seized the product shelves because of the user demand. But for the struggling brands, this idea can be a key identifier of the business strategy to take over other brands.
The key objective of this impression of “Lubricants shelf” is to create an overview of your brand positioning in this competitive market.
A discussion on Lubricants Shelves; from the evaluation perspective, a discussion ground has been created to solely represent this trade, as well as its other stakeholders.Why “Lubricants shelf” is key to monitor engine oil market?
The lubricants shelves of the overall market have already placed more than 100 brands altogether and the number of brands is increasing day by day.
And the situation is being worsened while so many by name products are taking the different shelves of different clusters. This market has become more overstated in terms of brand names and local products.
You may argue with us; lubricants shelves have no more space to place your new brands. You might get surprised by hearing such a statement. For your information, it’s not a surprising one.
Regularly, lubricants retailers have to welcome the representatives of newly entered brands.
And, business Insiders has depicted this lubricants market as a silent trade with a lot of floating traders.
On an assumption, the annual domestic demand for lubricants oils is around 100 million litres, whereas base oil demand around 140 million litres.
However, the lack of market monitoring and the least reporting makes the lubricants trade unnoticeable to the public.
Headline crude prices for the week beginning 11 February 2019 – Brent: US$61/b; WTI: US$52/b
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