As OPEC extends its production cuts to at least March 2018, Asian refiners are beginning to worry where they will get adequate crude supplies for their fast-growing markets. In April alone, North Sea tankers took more than 16 million barrels to Asia. Once more the income will be flooding into the UK Treasury. We have yet to see figures for May but all expectations are that this demand will grow.
According to Yasushi Kimura, president of the Petroleum Association of Japan, and chairman of petroleum conglomerate JXTG Holdings:
‘In 2017, global demand is likely to exceed supply … and crude prices are likely to … rise toward $60 by the end of the year.’
This may turn out to be a conservative guess. See:
‘According to investment bank Cantor Fitzgerald Europe Oil could hit $60 a barrel by the year end if the OPEC pact to curb oil output is extended. The OPEC pact has already been agreed to end 2017 with signs it might be expected to hold up into 2018 and even exceed that figure to £70. These are well above profitability levels.’
Suggestions that fracked shale oil has a long-term future in filling these shortages are built on sand or should I say lack of it:
Further, a looming crisis in the health consequences of fracking is nearly with us. I anticipate fracking going into steep decline as these worries gain traction with mainstream politics. See:
Fracking ‘Makes Workers Sick’