Energy markets explained

We live in a time with major societal, technological and political trends reshaping the global energy industry. At the same time oil prices are on the rise again, cash flows are optimistic, and companies are turning profits for the first time since the collapse.

However, due to geopolitical challenges, we risk losing crude oil exports from major producing countries. Can increases in U.S. shale production potentially affect the global supply balance – and how will the Middle East respond?

The Iranian and the Venezuelan oil exports counts for a major share of the total market supply. As we face the risk of losing a big volume of crude oil exports from the market, prices keep ticking higher.

Amrita Sen, Chief Oil Analyst at Energy Aspects has flagged the political challenges in Venezuela as a major risk. US sanctions cripples their industry – majors are pulling out, due to lack of both personnel and equipment. The country has the largest reserves in the world, but their current exports are barely 1.1 million barrels per day – with a risk of falling below 1 million.

The U.S. government’s decision to pull out of the Iran Nuclear deal and to impose new sanctions, might pose a threat to the market supply. The question is how the loss of both Iranian and Venezuelan exports will affect oil prices – and if others will be able to deliver enough to fill this gap.

“…This is the issue. We have been drawing down inventories because demands have been phenomenally strong, but we haven’t been investing. We have talked about this before. No one have been investing, because oil prices have been low. Even OPEC hasn’t been investing. And now suddenly these outages or potential outages come on the horizon, we don’t have enough spare capacity”, Amrita Sen argued in an interview on CNBC 22 May 2018.

Amrita Sen will share her analytical insight on some of these issues in the conference session “Energy markets explained”, Monday 27 August 2018.

Optimistic prospects for U.S shale – but will it affect the global supply balance?
In its latest annual outlook, the International Energy Agency (IEA) forecasted that the United States will dominate the oil industry for the next five years. U.S. shale companies are expected to accelerate production this year. With oil prices above $60 a barrel, the industry could turn profits for the first time. The U.S. industry has evolved geographically and technologically, and the companies that survived the collapse are more capable, efficient and better equipped to survive lower crude prices. Could increases in US shale production potentially disrupt the global supply balance, by forcing cuts by OPEC members and Russia?

Scott Douglas Sheffield, Chairman and CEO, Pioneer Natural Resources Co will share his views on the optimistic cash flow, production costs and expected profits in the industry in the “Energy markets explained” session.

What’s the outlook for the “gas power play”?
In this same session you will also hear from Eirik Wærness, Senior Vice President and Chief Economist, Equinor, Meg A. Gentle, President and CEO, Tellurian and Elena Burmistrova, Director General, Gazprom Export. They will address the global and European gas market and give you the Norwegian, U.S. and Russian perspectives and expectations for the next years.

Welcome to the ONS Conference session “Energy markets explained”.