“La sabiduría de la vida consiste en la eliminación de lo no esencial. En reducir los problemas de la filosofía a unos pocos solamente: el goce del hogar, de la vida, de la naturaleza, de la cultura”.
Lin Yutang
Cervantes
Hoy es el día más hermoso de nuestra vida, querido Sancho; los obstáculos más grandes, nuestras propias indecisiones; nuestro enemigo más fuerte, el miedo al poderoso y a nosotros mismos; la cosa más fácil, equivocarnos; la más destructiva, la mentira y el egoísmo; la peor derrota, el desaliento; los defectos más peligrosos, la soberbia y el rencor; las sensaciones más gratas, la buena conciencia, el esfuerzo para ser mejores sin ser perfectos, y sobretodo, la disposición para hacer el bien y combatir la injusticia dondequiera que esté.
MIGUEL DE CERVANTES Don Quijote de la Mancha.
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11 de febrero de 2018
OPEC's Oil Price Nightmare Is Coming True
U.S. shale production is surging on higher crude, now the fear is waning demand growth.
By
Julian Lee
Kean Collection via Getty
The latest surge in U.S. oil output will probably hasten
the country's rise to the top of the producer pile. More important, it's
starting to look as though at least half of OPEC's nightmare scenario
for 2018 -- a surge in shale output and slowdown in demand growth -- is
coming true.
Last
week's avalanche of releases from the U.S. Department of Energy showed
daily oil production above 10 million barrels a day for the first time
since 1970.
Boom!
U.S. oil production probably hit new highs in the past two months, surpassing 1970
Source: EIA
Note: Figures for the two most recent months are estimated using month-on-month growth rates
from weekly data.
A massive week-on-week jump of 332,000 barrels a day
must be treated with caution, though. U.S. drillers didn't have a
sudden rush of enthusiasm as WTI prices broke through a psychological
$65 ceiling. Rather, the weekly data, which aren't revised
retrospectively, are catching up with monthly estimates that give a more
accurate picture of output.
For much of last summer, the weekly data were heavily
criticized for over-estimating U.S. output growth. Now, the reverse is
true.
Assessments of the output in October and November based on
the weekly data were about 370,000 barrels a day lower than the monthly
figures, which are published with a two-month lag. There was probably a
discrepancy too in December and January.
The production surge
shown in the monthly data is unprecedented. Output rose by almost
850,000 barrels a day between August and November. It makes the first
shale boom of 2014-15 look sluggish.
True, that growth rate
probably wasn't kept up through the winter's cold snaps, but January's
average production rate will almost certainly turn out closer to the
10.25 million barrels a day in the DoE release than to the 9.86 million
calculated from the weekly data.
What does this mean?
First, bragging rights. The U.S. is close to becoming the
world's largest producer of crude and condensate -- a form of light oil
extracted from gas fields -- even if it's not quite there yet. It's
pretty much level with Saudi Arabia's combined output, itself boosted by
condensates not included in headline production numbers, and is closing
on Russia's 10.95 million daily barrels. That could be passed by the
end of the summer, according to Citigroup.
Heading for the Top
U.S. crude and condensate production is poised to overtake Saudi Arabia's, and pass Russia's before the end of 2018
Source: Bloomberg
Note: Saudi Arabia's production figures include an estimated 230,000 barrels a day of condensates
Of course, size isn't everything. Saudi Arabia and
Russia export far more production than the U.S. is ever likely to.
They're also willing to cut supply to bolster the market. They brought
about the recovery in prices on whose coattails the shale producers
ride.
The second, and more important, consequence is that OPEC and
friends' worst fear has come to pass: rising crude prices are spurring a
U.S. production revival. Their horror scenario is that this shale surge
goes hand-in-hand with a slowdown in oil demand growth, triggered by
the price rise.
Shale Hyperdrive
Monthly production figures have soared above estimates based on weekly data since September.
Sources: Bloomberg, EIA
There's little sign of that happening yet. Economic
forecasts remain strong and that ought to underpin another big increase
in the thirst for oil this year. But any signs of global demand growth
falling below the 1.53 million barrels a day OPEC forecast could cause
ministers some sleepless nights. Both OPEC and the International Energy
Agency will publish updated forecasts this week and the IEA already sees
growth slowing, as higher crude prices work their way through to
consumers. The other half of the nightmare is looming.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
