ESAI Energy: 2019 crude oil supplies sufficient

Even with the estimated loss of 1.1 million bpd of Iranian exports, ‘Global Crude Oil Outlook’ concludes that more crude production from the US, Brazil, UK, Russia and the Arab Gulf producers can offset other declines and still meet demand for crude-derived petroleum products.

Refinery throughput, notably, is predicted to increase a little faster than demand for crude -derived products, as new refineries come on line and as on-spec bunker fuels are produced and put into inventory. This refiner demand will keep the market balanced and perhaps a little tight in 2H19, but it will also lead to petroleum product inventory accumulation that will be bearish later on.

ESAI Energy has pointed out that productive capacity in Africa, Latin America and Russia is growing. The possible return of neutral zone production would only add to that capacity.

ESAI Energy Principal, Sarah Emerson, commented: “The bulls are banking on Murphy’s law, that a supply disruption is almost unavoidable, and that Saudi spare capacity will be insufficient. But there are so many other supply developments to consider. 2019 looks manageable.”

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