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.

Libya Unrest Shuts in 300,000 b/d of Crude Oil Output

Armed groups took over Libya’s Sharara oilfield last month, forcing the National Oil Company to shut down production. NOC says it will not restart the field until local security forces are reformed. This will take time, and we expect Sharara production to remain shut in until the summer. Libya will produce just 800,000 b/d of crude oil until the field restarts, down from recent levels of 1.1 million b/d.

Will 2019 Be More Dangerous for the U.S. and China?

Another naval incident in the South China Sea has the U.S. claiming freedom of navigation and China claiming provocation. Military conflict remains unlikely, but relations between China and the U.S. are fraying beyond just the trade war. The continued economic clash with Washington coupled with a Chinese economic slowdown, policy uncertainty in Washington, and the possibility of provocative actions by Taiwan or Japan could precipitate more serious conflict.