How Tight is the Oil Supply Demand Balance Whats different from 2014.The IEA publishes nice graphs showing the "Balance". The latest one shows us in an oversuppply until Q4 2019. They "say" there is about 2 MIllion bpd of spare capacity.
We see that supply and demand are both near 100 Million bpd. So what's changed from 2014:
1. Demand is up from 93 Million bpd;
2. US production is up about 4 Million bpd;
3. OPEC is up about 0.5 Million bpd ( from 32.5)
4. Canada is up about 1.0 MIllion bpd with no more growth in the foreseeable future;
5. Brazil is up about 0.5 Million
6. North Sea is flat
7. Mexico is down about a million bpd.
This is just a back of the envelope analysis, but you can see that we are precariously balanced. Also, it would appear that OPEC has more control than ever on supply/prices.
The EIA sees US shale growing to 10 Million BPD. I do not. I think the Permain hits its peak sometime in 2019. ONce US shale stops growing, the world is in a "world" of hurt.