Presented at: CSIS Energy and National Security Program By: Dr. Fereidun Fesharaki Chairman, FGE 15 October 2013 Washington, D.C. This presentation material contains confidential and privileged information intended solely for FGE clients. The dissemination, distribution, or copying by any means whatsoever without FACTS Global Energy’s prior written consent is strictly prohibited. The Global Oil Market: Critical Drivers
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Presented at:
CSIS Energy and National Security Program
By: Dr. Fereidun Fesharaki Chairman, FGE
15 October 2013
Washington, D.C.
This presentation material contains confidential and privileged information intended solely for FGE clients. The dissemination, distribution, or copying by any means whatsoever without FACTS Global Energy’s prior written consent is strictly prohibited.
The Global Oil Market: Critical Drivers
www.FGEnergy.com
2
Why are Oil Prices Stubbornly High? Global Supply Disruptions
0
1
2
3
4
mm
b/d
Iran South Sudan Nigeria Syria Yemen Libya
Nigeria Force Majeure: Bonny Light Usan Nembre Creek
Libya Uprising
Libya recent protests take total supply outage to over 3.5 mmb/d
Iran Sanctions
www.FGEnergy.com
60
70
80
90
100
110
120
130
140
7.0
7.5
8.0
8.5
9.0
9.5
10.0
10.5
11.0
J 11 F M A M J J A S O N D J 12 F M A M J J A S O N DJ 13 F M A M J J A
Why Crude Oil Prices are Likely to Fall Saudi Arabia’s difficulty in continuing to balance the market
Saudi “comfort zone”
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www.FGEnergy.com
Long-Term Brent Oil Price Outlook
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$-
$20
$40
$60
$80
$100
$120
$140
$160
US$
/bb
l
2012 are actual. Forecasts in $ 2013.
Ceiling - $120/bbl
Floor - $80/bbl
www.FGEnergy.com
4.2 mmb/d
NW Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU Africa NW
Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU
Africa NW
Europe
Med Europe
East Eur
North America
Carib/ LatAm
Asia
FSU
Africa
3.6 mmb/d 4.7 mmb/d
Distribution of Global Closures/ Run Cuts
PHASE I : 2008-2012 • Widespread cuts, but
Europe bears the brunt (40%)
PHASE II: 2013-2016 • OECD Asia biggest share:
Japan government plan, Australia + Philippines…
• Europe closures shift to Med
PHASE III: 2017-2020 • US leads cuts (demand,
crude infrastructure, LatAm) • Annual closures or run cuts
300-550 kb/d in 2016-20
Source: FGE World Refining Outlook 10
www.FGEnergy.com
-1,000
0
1,000
2,000
3,000kb/d Global Capacity Additions vs Demand Growth
Net CDUCapacity
NetProductDemand
-1,000
0
1,000
2,000
3,000
kb/d Excluding China, the Picture Looks Better Through 2016
Net CDUCapacity
NetProductDemand
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Even with Closures, Global Refinery Capacity Additions Overwhelm Demand Growth
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