EIA forecasts growing liquid fuels production...

[TOM4CWB]

https://www.greencarcongress.com/2022/06/20220618-eialiquids.html

"EIA forecasts growing liquid fuels production in Brazil, Canada, and China through 2023
18 June 2022

The US Energy Information Administration (EIA) forecasts that liquid fuels production in Brazil, Canada, and China will increase this year and next, contributing to growth in overall non-OPEC petroleum production. According to EIA’s June 2022 Short-Term Energy Outlook (STEO), petroleum production in the combined non-OPEC countries, excluding the Unites States and Russia, will increase by 3% (0.9 million barrels per day [b/d]) in 2022 and by 2% (0.8 million b/d) in 2023, compared with an increase of less than 1% (0.2 million b/d) in 2021.

...

For Brazil, the forecast assumes that production from six new floating production storage and offloading (FPSO) units will ramp up through 2023 and continue to drive growth, notably at the Sepia, Mero, and Buzios fields. Once they reach full capacity, these FPSOs will each produce between 70,000 b/d and 180,000 b/d of liquid fuels.

EIA expects Brazil’s production to increase from 3.7 million b/d in 2021 to 3.9 million b/d in 2022 and to 4.1 million b/d in 2023.

Canada’s growth in crude oil and natural gas production during 2022 and 2023 is driven primarily by expanding oil sands and debottlenecking projects. Canada’s growth is due in part to the Enbridge Line 3 crude oil pipeline expansion (760,000 b/d capacity), which became operational in October 2021. The TransMountain pipeline expansion project (890,000 b/d capacity) is slated to enter service at the end of 2022. Additional Enbridge expansions and optimizations to its existing pipeline system, if completed, will add more than 400,000 b/d of export capacity through 2023.

Due to this new pipeline capacity from Enbridge and other planned pipeline expansions, current constraints on oil exports from Canada are expected to lessen by the end of 2023 and drive increased production.

EIA forecasts that liquid fuels production in China, which increased by 130,000 b/d in 2021, will grow by an additional 170,000 b/d in 2022 and 80,000 b/d in 2023 in response to government calls for increased exploration and production. The remaining key sources of forecast non-OPEC production growth come from Norway, Argentina, Kazakhstan, Oman, and Guyana.

US refinery utilization averages 94% in 3Q22 in the forecast, as a result of high wholesale product margins. Despite the expectation that refinery utilization will be at or near the highest levels in the past five years, operable refinery capacity is about 900,000 b/d less than at the end of 2019. As a result, EIA does not expect total refinery output of products to reach its highest level in the past five years.

Global macroeconomic assumptions in STEO are from Oxford Economics and include global GDP growth of 3.1% in 2022 and 3.4% in 2023, compared with growth of 6.0% in 2021.

Posted on 18 June 2022 in Forecasts, Fuels, Market Background "

There is an obvious shortfall in petroleum liquid fuel... as Airlines ramp up flights, and in North America post pandemic travel is forecast to increase auto fuel consumption.

Dont be surprised when there is Diesel fuel shortages in North America... especially east and west coast.

Drying grain this fall... if required,,, could be 3x the cost of last year.

Cheers

[TOM4CWB]

https://www.greencarcongress.com/2022/06/20220618-ieaomr.html

IEA forecasts global oil demand to reach 101.6 mb/d in 2023; non-OECD countries lead expansion
18 June 2022

The IEA June 2022 Oil Market Report (OMR) forecasts world oil demand to reach 101.6 mb/d in 2023, surpassing pre-pandemic levels. While higher prices and a weaker economic outlook are moderating consumption increases, a resurgent China will drive gains next year, with growth accelerating from 1.8 mb/d in 2022 to 2.2 mb/d in 2023, according to the forecast. In contrast to 2022 when the OECD led the expansion, non-OECD economies are set to account for nearly 80% of growth next year.

Non-OPEC+ is set to lead world supply growth through next year, adding 1.9 mb/d in 2022 and 1.8 mb/d in 2023, according to IEA. As for OPEC+, total oil output in 2023 may fall as embargoes and sanctions shut in Russian volumes and producers outside the Middle East suffer further declines. Assuming Libya rebounds from a steep drop, the bloc’s production could increase 2.6 mb/d this year, eroding its spare capacity cushion.

Global refining capacity is set to expand by 1 mb/d in 2022 and 1.6 mb/d in 2023, boosting throughputs by 2.3 mb/d and 1.9 mb/d, respectively. Nevertheless, product markets are expected to remain tight, with a particular concern for diesel and kerosene supplies.

While diesel cracks eased month-on-month in May, both jet fuel and gasoline cracks surged as demand picked up seasonally.

Following nearly two years of declines, observed global oil inventories increased by 77 mb in April. OECD industry stocks also rose, by 42.5 mb (1.42 mb/d), helped by government stock releases of nearly 1 mb/d. At 2,669 mb, OECD industry stocks were nevertheless 290.3 mb below the 2017-2021 average.

Preliminary data for May show total OECD stocks building by 6 mb. Despite economic headwinds, steady demand for light sweet crude in a tight physical market is boosting marker grade prices as they are in the same crude quality family. Since 6 June, WTI and Brent futures have averaged above $120/bbl. North Sea Dated hit $127.9/bbl on 13 June.

After seven consecutive quarters of hefty inventory draws, slowing demand growth and a rise in world oil supply through the end of the year should help world oil markets rebalance, IEA suggests. This situation might prove short-lived, however, as tougher sanctions on Russia come into full force, oil demand in China recovers from COVID-lockdowns, if sharper Libyan losses persist and the OPEC+ spare production capacity cushion erodes.

Higher oil prices and a weaker economic outlook continue to temper IEA’s oil demand growth expectations. In 2023, a resurgent China will boost non-OECD demand growth, offsetting a slowdown in the OECD. Following gains of 1.8 mb/d this year, world oil demand is forecast to expand by 2.2 mb/d to 101.6 mb/d in 2023.

Global oil supply may struggle to keep pace with demand next year, as tighter sanctions force Russia to shut in more wells and a number of producers bump up against capacity constraints.

EU countries have agreed to ban 90% of the bloc’s imports of Russian crude and oil products, to be phased out over the next six to eight months. Modest increases from OPEC+ will provide a partial offset, but non-OPEC+ will dominate gains for the remainder of the year and in 2023.

Non-OPEC+ producers, led by the US, will add 1.9 mb/d of supply in 2022 and 1.8 mb/d next year. Nevertheless, to keep the implied balance from tipping into deficit, OPEC+ would have to further tap into its dwindling capacity cushion, reducing it to historic lows of just 1.5 mb/d.

With the start of summer, gains in oil product prices and cracks have been even stronger as refinery output has failed to keep up with demand for key products.

As the refinery maintenance season winds down in the US, Europe and Asia and a rebound in Chinese throughputs gathers pace, global refinery activity is set for a solid recovery, IEA forecasts. Runs are forecast to rise by 3.5 mb/d from May through August, and by 2.3 mb/d for the year on average. A further 1.9 mb/d increase is expected next year, supported by new refinery start-ups in Africa, the Middle East and Asia.

However, shortages in individual products may well persist due to uneven rates of demand growth and limits in the refining system. Diesel and kerosene supplies remain of particular concern, IEA said.

OECD industry stocks of middle distillates have fallen by 25% since January 2021 to their lowest levels since 2004. That very limited cushion is driving middle distillates prices to record highs, with a knock on effect for other products which could cause more pain at the pump just as pent-up demand is unleashed during the peak driving and summer cooling season.

Posted on 18 June 2022 in Forecasts, Market Background, Oil