Market Alert: OPEC Takes Step to Balance 2019

The OPEC+ decision to cut crude oil output by 1.2 million b/d (from October) should be enough to balance the global oil market for the next six months, and possibly the entire year if extended. Yet, it will not fully counteract the surplus that accumulated in the latter half of 2018. So, while this agreement is clearly supportive of prices, the magnitude of the upside in 2019 will depend on compliance with the agreement, future changes to Iran sanctions waivers, product demand growth meeting expectations, and IMO preparations later in the year.

Peace Deal in South Sudan adds another 70,000 b/d of crude to market

Hellenic Shipping News:

As the market eagerly awaits an OPEC+ deal, non-OPEC producers continue to make gains. Sudan and South Sudan are likely to raise crude oil production in 2019, according to ESAI Energy’s recently published Africa Watch. A peace deal in September halted South Sudan’s five-year civil war between forces loyal to President Salva Kiir and others backing Vice President Riek Machar. The peace deal has, for now, stopped fighting that has decimated Sudan and South Sudan’s crude production since the latter’s independence in 2011.

Peace deal in South Sudan adds crude to market

World Pipelines:

As the market eagerly awaits an OPEC+ deal, non-OPEC producers continue to make gains. Sudan and South Sudan are likely to raise crude oil production in 2019, according to ESAI Energy’s recently published Africa Watch. A peace deal in September halted South Sudan’s five year civil war between forces loyal to President Salva Kiir and others backing Vice President Riek Machar. The peace deal has, for now, stopped fighting that has decimated Sudan and South Sudan’s crude production since the latter’s independence in 2011.

Market Alert: Alberta to Cut Over-Supply of Crude

In response to a glut in oil supply in the province, the government of Alberta is mandating a temporary production cut of 325,000 b/d. If the mandate is followed to the letter, it would eliminate close to 20 million barrels of inventories by March 2019, roughly the amount of stock build from the past twelve months. Further production curtailments of 95,000 b/d could last until the end of 2019 if stocks do not draw down significantly. We had forecast Canadian production to fall by 30,000 b/d in 2019. In light of these developments, we are accelerating the decline to 90,000 b/d.

China LPG Imports to Rebound

Hellenic Shipping News Worldwide:

China’s LPG imports will rebound in 2019 after dismal growth of a little over 20,000 b/d in 2018, according to ESAI Energy’s newly published Global LPG Outlook. A new wave of PDH investment will reignite Chinese demand. In a market flush with new supply, exporters will count on an uptick in Chinese demand to stave off a global glut.

China LPG imports to rebound

World Pipelines:
China’s LPG imports will rebound in 2019 after dismal growth of a little over 20 000 bpd in 2018, according to ESAI Energy’s newly published Global LPG Outlook. A new wave of PDH investment will reignite Chinese demand. In a market flush with new supply, exporters will count on an uptick in Chinese demand to stave off a global glut.