“Are recent improvements in crude prices sustainable or will the market swing into imbalance once again?”
Combining data and insights from a suite of energy market forecasting models, our outlook focuses on the impact of key drivers on the pace and timing of oil price recovery, the evolution of regional oil production (including shale oil), and the economic implications of long-term market trends for oil supply and demand.
The Global Oil Supply and Demand Outlook can be purchased in 3 different formats: medium-term outlook (next 3 years), long-term outlook (to 2030), or a combination of both. Purchase includes a comprehensive PDF report as well as Excel data tables.
“As US shale oil displays strong growth and global project breakevens improve, will recovering oil demand be sufficient to absorb supply additions?”
Click through the legend to explore the impact of various project types and lifecycles on oil supply growth through 2030.
1. Mid-term oil recovery scenario
In our “Lower for Longer” base case scenario, oil prices do not recover until late 2020 due to increasing supply from US shale that breaks even at $55/bbl, as well as releasing of inventories
2. Long-term oil demand growth outlook
Long-term oil demand growth is expected to slow down to 0.7% p.a. as strong growth from chemicals is somewhat offset by peaking road transportation demand due to energy efficiency and EV penetration
3. Long-term oil supply growth outlook
On the supply side, the industry needs to replace 4-5MMb/d production every year due to declining production in mature basins. Growth is expected to come primarily from shale oil until 2025-26 and offshore thereafter as US shale oil starts to decline through to 2030
We assume OPEC will maintain its market share at around 43-45% in the long run with Saudi Arabia increasing production gradually towards 12MMb/d. We expect the organization will manage output to balance the market when needed
5. Global cost curve
The marginal cost of supply in the long-term is expected to be in the $65-75/bbl range in the long term, thanks to sustained cost compression, operational efficiency improvements, and slow demand growth
WHAT'S IN THE REPORT
March 2018 | We expect 5 key signposts will set the cost of the marginal barrel of oil in the long term: global oil demand, non-OPEC declines, North American shale oil, OPEC production, and new project costs.