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Glenloch Energy October Oil Market Forecast

November 1, 2021

Glenloch Energy October Oil Market Forecast

The COP26 Edition

The October edition of Glenloch Energy's Oil Market Forecast ("OMF") (published on the 28th of October) comes on the back of one of the most eventful months in recent history, with rising gas prices and an energy crunch bringing energy security back onto the global agenda. The combination of factors that has European nations bringing coal and oil fired power back on line and looking for ways to shield their citizens from soaring energy prices comes just before the start of the UN Climate Change Conference in Glasgow.

The COP 26 starts at the end of this month, and in preparation all the major forecasting agencies have updated their long term oil demand scenarios. We start by examining those, before looking at medium term supply and demand, storage, prices, and US activity.

A few key points:

  • The IEA and EIA have both raised their reference estimates of long term oil demand, OPEC cut their estimate slightly.
  • The IEA Stated Policies scenario and OPEC’s long term demand forecast are now close to identical, the EIA reference case predicts much higher oil demand.
  • The reference case long term scenarios from each agency show oil demand growth through 2045 or 2050; barring substantial national policy changes oil demand is predicted to continue rising for the next 30 years.
  • The IEA upgraded its demand estimate for 2021 and 2022; all forecasting agencies are now predicting 2022 oil demand above pre-pandemic levels.
  • There were calls from the OPEC General Secretary and a warning from the Economist that current levels of investment in oil & gas infrastructure were not sufficient to meet demand, increasing the risk of volatility in energy prices.
  • We estimate that global storage will have fallen to pre-pandemic levels by the end of the year and expect it to continue falling given the tight market.
  • Prices reached new post-pandemic records and the futures market for Brent and WTI reached its highest level for the year.
  • The US land oil rig count reached 431.

Access Glenloch Energy's October OMF here.


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