Monday, October 12, 2020

Platts' Commodity Tracker: 5 charts to watch this week

 From S&P Global Platts:

The global oil supply path into 2021 is in focus this week, along with the impact of storms on US  oil output. Away from oil, we also survey they outlook for LNG demand in Asia and the European power mix, and look at the key factors driving the copper market.

1. OPEC+ compliance, Libya output to drive global oil supply growth in Q4

Global oil supply forecast 2020 2021

What’s happening? Global oil supply has increased by 3.6 million b/d from July through September after dropping more than 13 million b/d from April to June. This is despite a more active hurricane season in the US Gulf, which has temporarily removed upwards of 100,000 b/d of crude oil production. OPEC+ has carefully managed providing additional barrels to the market as oil demand has recovered from peak pandemic impacts seen in Q2.

What’s Next? Supply increases are set to slow starting 4Q 2020 as OPEC+ pushes for compliance and cohesion. OPEC will meet towards end-November to review market demands and quotas. Production increases in Libya are expected to be choppy and sustainability is uncertain. Geopolitics will take center stage with US presidential elections in November. If the Democrats win the White House some sanctioned barrels (Iran, Venezuela) could re-enter the market. S&P Global Platts Analytics forecasts show non-OPEC supply growth over 2020 and 2021 will be limited to few key areas – Norway (300,000 b/d), Brazil (320,000 b/d), Guyana (120,000 b/d), and Canada (85,000 b/d). Declines will be widespread with the US seeing the biggest falls, of 865,000 b/d in 2020 and more than 1.14 million b/d in 2021....