According to the US Energy Department, US crude production hit 11 million barrels per day in early July. This was always seen as an inevitability, but the speed at which the mark has been achieved has been astonishing. It was only eight months ago in November 2017 that the US production reached 10 mmb/d – a level that had only been reached (briefly) in 1970. Back then, the Energy Information Administration (EIA) predicted that American output would reach 11 mmb/d by November 2018. While the Energy Department’s figures have yet to be confirmed by the EIA – which releases confirmed data on a lag of 2 months – there is no reason not to believe that the mark hasn’t been achieved.
In any other month, this would make the USA the largest crude producer in the world, except for a jump in Russian production to 11.2 mmb/d. The recent OPEC+ agreement means there is room for Russian (and Saudi Arabian) output to grow, so the race for the title of world’s largest crude producer will be tight for a while, but America has more potential and it seems only a matter of time before American production nears the 12 mmb/d mark. Perhaps next year? With crude prices at their healthiest levels for 4 years, there is every reason for American drillers to keep pumping, although concerns over geopolitical issues about supply and global oil demand could curb potential.
The nature of the shale revolution is the US is also changing. Just last week, Concho Resources completed its US$9.5 billion acquisition of RSP Permian, creating the largest unconventional shale producer in the Permian Basin. ExxonMobil, Chevron and Shell are moving in on the Permian, while BP is looking to be the frontrunner in purchasing BHP Billiton’s onshore shale and gas assets. At the start, the US shale revolution was characterised by a large number of small and nimble players riddled with debt; as it now matures, consolidation is setting in to create a smaller number of larger players. This is viewed as necessary to make the sort of large-scale investments required to take the shale revolution to the next level, but this can also cause inertia in growth, since merged and larger firms are likely to be far more risk averse due, as they are answerable to shareholders.
However there are still some challenges ahead in the Permian. The most important for now seems to be infrastructure, or lack thereof. Pipeline bottlenecks in the onshore shale plays, particularly the Permian, are making it increasingly difficult for producers to get their oil to market, especially the clearing point in Cushing, Oklahoma. This constraint has been behind the large Brent-WTI differential over the past two months, as crude volumes remained stuck without access to the market. Figures indicate that the Permian currently has some 3.56 million barrels per day of pipeline capacity, equivalent to current production, meaning that pipelines are operating at full capacity. New pipelines are being planned, but this will take time, restricting immediate growth. And with more drilling activities taking place, costs in the supply chain is also expected to go up in tandem. The issue about actual profit margins in the Permian has often been debated due to the amount of debt poured into the region, when oil prices were at marginal levels. Current prices do provide some relief but existing operators who are highly leveraged do run a high risk, if prices trend downhill.
Despite all that, the 12 million barrel per day mark seems to be a question of when, not if. If the US succeeds in its aim to reduce Iranian crude exports significantly by November, the additional American volumes could be a necessity, not a spanner. The pieces are all in place for that to happen, and while the Energy Department and the EIA have not issued any formal forecast, we would not be surprised if American oil output came very close to the mark this time next year.
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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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