U.S. Crude Production Decelerates in 2019

After growing by almost 1.6 million b/d in 2018, US crude production will slow down this year, but will still rise by 1 million b/d. That year on year average growth however, translates into only 500,000 b/d of growth between December 2018 and December 2019. Growth continues to be led by shale, which rises by roughly 850,000 b/d year on year. New projects are also ramping up in the Gulf of Mexico (GOM), contributing another 150,000 b/d. Total US output will reach over 12 million b/d in the second half of the year, lifting exports of crude oil higher, to average close to 2.5 million b/d in 2019.

AMLO’s Battle Against Fuel Theft

World Pipelines: 

Mexico’s new President, Andrés Manuel López Obrador, hoped to kill two birds with one stone: reduce theft from gasoline pipelines and diminish Mexico’s reliance on gasoline imports from the US. Instead, the recent pipeline closures and related explosion that resulted in the deaths of at least 96 people have caused a spike in gasoline imports from the US in January. This increase in imports, notes ESAI Energy’s recent Latin America Watch, comes even as supply shortages have dented demand for motor gasoline by as much as 40 000 bpd this month.

Market Alert: Venezuela Splits in Two

Venezuela now has two heads of state, Juan Guaidó and Nicolás Maduro. The US firmly backs Guaidó and has promised economic and diplomatic support. Maduro, meanwhile, still retains the support of the Venezuelan military. The situation will evolve over the coming days and weeks. The US remains undecided on whether to ban the 500,000 b/d of US imports of heavy Venezuelan crude. In the meantime, these  developments will continue to provide support to heavy crude prices.

Competition Drowning Out Collaboration in 2019

As 2019 stretches out ahead of us, the World Economic Forum will meet this week and is likely to highlight the rise of competition over collaboration between countries, and the implications for the global economy. The global oil market is not immune to these forces. Notwithstanding the “cooperation” represented by the recent OPEC deal, falling OPEC exports and rising US exports will be unsettling this year. Competition in the oil markets is likely to intensify by the end of 2019. That is generally bearish for oil prices.

Jet keeps driving European distillate demand growth in 2019

Hellenic Shipping:

According to ESAI Energy’s recently released Europe Watch Products, European jet fuel demand will rise by just 30 000 bpd this year, compared with 60 000 and 80 000 bpd in 2018 and 2017, respectively, as growth in both passenger and freight air traffic continues to slow. Nevertheless, jet fuel will continue to account for the vast majority of total distillate demand growth in the region.

Jet keeps driving European distillate demand growth in 2019

Hydrocarbon Engineering:

According to ESAI Energy’s recently released Europe Watch Products, European jet fuel demand will rise by just 30 000 bpd this year, compared with 60 000 and 80 000 bpd in 2018 and 2017, respectively, as growth in both passenger and freight air traffic continues to slow. Nevertheless, jet fuel will continue to account for the vast majority of total distillate demand growth in the region.