Friday, January 19th, 2018

Randy Kenworthy Summarizes EIA’s Latest Report

Randall KenworthyOn Tuesday, January 16, 2018, the EIA (Energy Information Administration) released its first monthly report for 2018. The report is designed to give insight into the oil and gas industry as to what to expect in crude oil and natural gas supply, demand, prices, and other various factors for the upcoming months and years.

Coachman Energy Operating Company’s COO, Randall “Randy” Kenworthy is pleased to provide this summary of some of the main highlights regarding supply and demand as well as additional noteworthy information included in the report.

  • SUPPLY:
    • EIA increased its forecast for 2018 non-OPEC supply by 350,000 BOPD to 60.69 MMBOPD, which implies an annual increase of 2.030 MMBOPD
    • EIA continues to forecast growing U.S. production. The group now forecasts U.S. crude oil production to average 10.3 MMBOPD in 2018, which would mark the highest annual average production in U.S. history, surpassing the previous record of 9.6 MMBOPD set in 1970. EIA forecasts also introduced its initial 2019 numbers with production set to increase to an average of 10.8 MMBOPD in 2019 and to surpass 11 MMBOPD in November 2019.
  • DEMAND:
    • EIA raised its forecast for 2018 global demand by 150,000 BOPD to 100.11 MMBOPD, which implies annual demand growth of 1.72 MMBOPD
    • EIA expects India and China to be the largest contributors to growth in non-OECD petroleum and other liquid fuels consumption in 2018 and 2019. Additionally, EIA expects petroleum and other liquid fuels consumption growth in the Middle East to rise in 2018 and 2019. EIA sees the OECD demand growth driven by the U.S. and modest growth out of Europe.
  • EIA January 2018 Monthly Report SummaryNOTEWORTHY POINTS:
    • EIA on crude prices: West Texas Intermediate (WTI) crude oil spot prices are forecast to average $56/bbl in 2018 and $57/bbl in 2019.
    • EIA on natural gas prices: Henry Hub natural gas spot prices are forecast to average $2.88/MMBtu in 2018 and $2.92/MMBtu in 2019.
    • EIA on global inventories: “EIA estimates that global petroleum and other liquid fuels inventory draws averaged 400,000 BOPD in 2017, marking the first year of global inventory draws since 2013.” That said, EIA’s inventory outlook has been tempered and “EIA expects global inventories to increase by 200,000 BOPD in 2018 and by 300,000 BOPD in 2019.”

As COO, Randy Kenworthy oversees Coachman Energy Operating Company’s ongoing business operations including structuring and pursuing strategic growth initiatives within its core areas of operation.

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