Follow us:
Subscribe to our newsletter

logo

  • News
  • Projects
  • Business and Finance
  • Innovation
  • Products and Services
  • Events
  • Online Magazine
  • Advertise
  • Contact
Home
  • News
  • Projects
  • Business and Finance
  • Innovation
  • Products and Services
  • Events
  • Online Magazine
  • Advertise
  • Contact
Quotes by TradingView

BHP releases economic and commodity outlook

21 Aug, 2018
360
Image via. BigStock


BHP has just released the 2018 edition of their Economic and Commodity Outlook, which states that the strong performance of the oil price over the last 18 months surprised their analysis, ‘in scale, but not in direction’.

Crude Oil

In the US alone, liquid production of crude oil is expected to increase by almost +1½ thousand barrels per day (MBPD) in calendar year 2019, with roughly half of that increase coming from the Permian. That compares to around +2 MBPD in calendar year 2018.

BHP’s market analysists found that pronounced take–away constraints in the Permian are likely to occur in regional price discounting, while completion constraints are evident on a broader basis, with around 500 drilled but uncompleted wells added nationally in the calendar year to April. Takeaway constraints are also expected to persist deep into calendar year 2019, while completion constraints are all expected to be alleviated somewhat earlier.

Global demand growth was strong and broad-based in calendar year 2017, at +1.5 Mbpd, or 1.6 per cent year-on-year (YoY). Following this, the positive demand environment continued into calendar year 2018, with a very strong March quarter (+1.8 Mbpd, or 1.9 per cent YoY). However, BHP found indications that a global ‘slowdown’ emerged in the June quarter. Chinese growth remained robust overall and is currently on track for an outcome between 3½ and 4 per cent in calendar year 2018.

Demand has increased modestly from the OECD (which consists of the United States, much of Europe, and other advanced countries), with growth in the US and Europe partly offset by a small decline from developed countries in the Asia–Pacific. There was also a forecast of 6 per cent growth in India’s crude demand in 2018, with transport demand continuing to be a significant driver of its growth.

“In the long-term, we continue to see compelling market fundamentals, underpinned by rising transport and industrial demand in the developing world in addition to a steepening cost curve underpinned by natural field decline,” commented Dr Huw McKay, Vice President, Market Analysis & Economics at BHP.

Eastern Australian gas

The analysis also suggests that the ramp-up of Queensland LNG projects has altered the shape of the market. Long-term, BHP expects the domestic market will become closely linked to the international LNG market. This forecast comes from the conclusion that southern demand centres are expected to become‘increasingly reliant on the supply of gas from Queensland LNG resource holders, and potentially LNG imports to balance the market, due to declines from existing fields.

“We continue to believe that lifting restrictions on onshore gas development – both conventional and unconventional – has the capacity to provide significant additional supply to the market,” said Mr McKay.

Australian power market

BHP said their analysis on the Australian power market awaits the final shape of National Energy Guarantee (NEG) and a decision on whether it will be implemented, however, Mr McKay also noted that their analysis does suggest the NEG should result in lower prices ‘in due course’, in comparison to a scenario where there is no national coordination on climate and energy policy.

The NEG is designed to ensure there is sufficient ‘dispatchable’ capacity in the system to balance the intermittency of wind and solar, and according to the market analysts, without this focus on dispatchability, the benefits of growing renewable penetration would likely be offset by a reduction in system strength and reliability.

“Accordingly, we have called on Australian governments to embrace this opportunity for reform and begin the process of implementing the Guarantee,” the statement from BHP read.

This is only a brief summary of relevant oil and gas forecasts that were highlighted in the document. If you are interested in seeking the full Economic and Commodity Outlook document, you can find it here.

Related Articles

Woodside responds to Santos merger speculations

Woodside responds to Santos merger speculations

Oil and Gas Digital Transformation Conference 2024

TotalEnergies makes its AUSEA technology more accessible

TotalEnergies makes its AUSEA technology more accessible

Mobil continues investing in its Melbourne terminal

Mobil continues investing in its Melbourne terminal

Comments

Leave a comment Cancel reply

You must be logged in to post a comment.

Latest Posts

  • Latest News
  • Latest Projects
08 Dec

Woodside responds to Santos merger speculations

07 Dec

Origin shareholders vote against Brookfield acquisition

07 Dec

Exxonmobil sells business and assets in Fiji and New Caledonia

06 Dec

TotalEnergies makes its AUSEA technology more accessible

04 Dec

Woodside signs off on COP28 Oil and Gas Decarbonisation Charter

07 Dec

Plans released for new Port Hedland LNG plant in WA

06 Dec

EnerMech advances gas import project in Germany

06 Dec

Hartshead Resources secures funds for first phase of UK project

06 Dec

Galilee Energy welcomes progress on Glenaras Gas Project

29 Nov

QPME prioritises growth and safety at Moranbah Project

Online Magazine

    Current Cover
  • Login
  • Subscribe

Subscribe

Subscribe to our newsletter or print magazine

Our Titles

  • Home
  • Contact Us
  • Terms and Conditions
  • Privacy
© Sage Media Group 2023 All Rights Reserved.
×
Authorization
  • Registration
 This feature has been disabled
 This feature has been disabled until further notice, however you may still register
×
Registration
  • Autorization
Register
* All fields required