This is the first issue of 2021 and so naturally the focus is very much on what to expect in the coming year. 2021 opens with a new President and a change in control in the Senate and so this seems an appropriate point to consider the political outlook in the US in the near term.
In this edition, we start by considering the US political outlook and then move on to an update of global crude oil supply and demand. We then look at storage and pricing before concluding with a summary of US onshore activity levels.
A few key points:
- Based on their campaign commitments, the incoming President and the 117th Congress are likely to provide a markedly less supportive US oil investment environment than that seen in recent years. Policy changes are less likely to have a significant impact on global oil demand over the next decade or so.
- Under current assumptions, the oil market returns to oversupply in the spring of 2021 flips to a supply deficit in 2022 which widens in 2023 and beyond.
- Estimates of global crude stocks in 2021 support a further extension of OPEC+ production curbs through the second half of 2021.
- Brent crude futures are now above $50/bbl through 2028 and WTI futures are above $50/bbl for the rest of the year.
- US land oil rig counts have continued to rise, an increase which is expected to continue, albeit at a slower rate, for the rest of the year.
Access the full report on Glenloch Energy's web site here.