Venezuela has stayed behind in delivering crude to customers from its oil export terminals, as delays and production declines could damage the state-run PDVSA’s supply contracts if they are not cleared as soon as possible. Tankers are waiting to load more than 24 million barrels of crude.
Shell informed that it made a large, deep-water, exploration discovery in the Norphlet geologic play in the US Gulf of Mexico with its Dover well. The Dover discovery is Shell’s sixth in the Norphlet and encountered more than 800 net feet of pay. The discovery was made 13 miles from the Appomattox host.
EIA said that US crude oil exports averaged 1.1 million barrels per day in 2017 and 1.6 million b/d so far in 2018, an increase from less than 0.5 million b/d in 2016. This increase happened despite the fact that US Gulf Coast onshore ports cannot fully load Very Large Crude Carriers. Instead, export growth was achieved using smaller and less cost-effective ships.
Morgan Stanley noted that crude oil prices will reach $90 a barrel by 2020 as the 2020 sulphur cap on shipping emission come into force. The changes will increase demand for distillate products such as diesel and marine gasoil, driving up the need for crude oil. The refining industry will need to produce more “green” fuels.
EIA’s May Short-Term Energy Outlook predicts that Brent crude oil prices will average $71 per barrel in 2018, $7/b higher than last month’s STEO. EIA’s forecast for regular gasoline retail prices increased to an average of $2.79/gallon in 2018, $0.15/g higher that in last month’s STEO. Monthly average Brent crude oil spot prices have increased in 9 of the past 10 months.
Oil market has been shaped by strong growth in demand, compliance by countries party to the Vienna agreement to cut output, and the crisis in Venezuela, leading to tighter overall market conditions. The restoration of sanctions on Iran, which exports 2.5 million barrels of oil a day and is the world’s fifth-largest exporter, may affect the market balance.
Oil prices decreased on Thursday 3 of May, as a rise in US crude inventories and a record weekly US production was reported, This increase is opposing to the efforts made by OPEC to decrease supplies and tighten the market. The prices were reduced after a report by EIA, which showed that US crude inventories increase by 6.2 million barrels to 435.96 million barrels.
The World Bank expects oil prices to average $65 a barrel over 2018, increasing from $53 a barrel in 2017. This will be caused by strong demand from consumers and a simultaneous restraint by oil producers. Metals prices are expected to rise 9% in 2018, because of the same reasons. Prices for energy commodities, including oil, natural gas, and coal, will increase by 20% this year.
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