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Monday, October 15, 2018


According to PIW, The Energy Intelligence Group believes that oil prices will remain high even if oil supplies are boosted this spring.

PIW says that oil stocks are so low that they would not hit a “comfort" range" even if OPEC decided this month to raise the output by 1.7 mbd from current production rates. Should OPEC add another 1 mbd in September, as the most generous of the scenarios envisages, inventories at the end of the year would still be below the meagre levels of December 1999.  PIW assumes a non-OPEC supply of some 43.7 mbd in 2000, increasing from 43.4 mbd in 1Q to 44.3 mbd in 4Q. The "3rd" OPEC scenario which adds 1.7 mbd in March and another 1 mbd in September will mean quarterly OPEC production of  26.9 mbd in 1Q, 28.4 mbd 2Q, 28.6 mbd 3Q and 29.6 mbd 4Q  and 28.4 mbd for the year 2000.  This would still raise stocks only by 0.1 mbd or covering 8.3 days for the year 2000. Historically prices have risen when stocks covered fewer than 11 days.