Macro Oils long-term outlook H2 2019 Report

Commodity Market Report 22 November 2019

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Report summary

The autumn update to our long term outlook shows moderately lower demand than we expected in the spring although the trend remains the same: growth into the 2030s and then a plateau to 2040. To no one’s surprise, US production is revised downward as the investment community throttles back available dollars for tight oil projects. We expected a significant slowing in US supply growth early next decade, with 2018 the peak year of increases, but the curtailed investment environment for independent producers in the US has added extra braking of growth. What do these changes mean? Prices are revised moderately lower with the largest effect in the period before 2025. We still expect non-OPEC production to flatten and then decline after 2030. Fuel efficiency gains and inroads by electric vehicles mean liquids demand plateaus by the late 2030s.

Global supply outlook switches away from strong growth during the mid-2020s
Non-OPEC: pace of short-term supply growth slows in early 2020s; broad plateau from 2025 to 2035
US Lower 48: a story of deferred growth
Russia leads the revisions elsewhere in non-OPEC
OPEC long term capacity increases despite sanctions losses in Iran and Venezuela
Global demand: heading toward a plateau by the late 2030s
Fuel demand from passenger cars: reaching a peak after 2030
The fight against air pollution: another force shaping transport fuel demand
Demand for petrochemical feedstocks