Has OPEC done «whatever it takes»?

Transkript

1 Has OPEC done «whatever it takes»? Webinar Thina Margrethe Saltvedt, Chief Analyst Macro/Oil (Ph. D.)

2 Brent oil price fell sharper than expected after May OPEC-meeting USD 44-53/barrel 54 USD per barrel OPEC +11 cut USD 53-57/barrel OPEC +10 cut extended Source: Bloomberg and Nordea Markets 2

3 Brent oil forward curve almost flat Before Nov-16 OPEC meeting 59 USD per barrel After May-17 OPEC meeting Early May Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 Jul-22 Oct-22 Jan-23 Apr-23 Jul-23 Oct-23 Jan-24 Apr-24 Source: Bloomberg 3

4 OPEC s aim: Global oil inventories need to fall back to normal levels before we can see a more robust upswing in oil prices 1200 Cut 300 mb 1000 Average OECD Europe 800 Million barrels OECD Asia Oceania OECD Americas Jan-05 Jun-05 Nov-05 Apr-06 Sep-06 Feb-07 Jul-07 Dec-07 May-08 Oct-08 Mar-09 Aug-09 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Source: IEA 4

5 OPEC s cut-strategy is challenged by a sharp upswing in US shale 35 OPEC US 800 US rig efficiency has increased sharply Million barrels per day million barrels per day Barrels per rig /09/ /04/ /11/ /06/ /01/ /08/ /03/ /10/ /05/ /12/ /07/ /02/ /09/ /04/ /11/ /06/ /01/2017 Source: Bloomberg 5

6 Libya and Nigeria have increased production lately, will it last? Libya Nigeria Thousand barrels per day Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13 Sep-13 Jan-14 May-14 Sep-14 Jan-15 May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 Source: IEA 6

7 Russia has soon fulfilled its part of the deal. But for how long will Saudi accept an increase by Iran? Thousand barrels per day Russia Thousand barrels pre day Saudi Arabia Iran Thousand barrels per day /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /07/ /10/ /01/ /04/ /06/ /09/ /12/ /03/ /06/ /09/ /12/ /03/ /06/ /09/ /12/ /03/ Source: Bloomberg 7

8 Mission completed in Q (dark blue): If OPEC-11 + Russia keep their promise, Libya/Nigeria keep production at hold and US shale continue climbing % compliance, Libya and Nigeria on hold, EIA US Million barrels Q2017 2Q2017 3Q2017 4Q2017 1Q2018 8

9 Mission completed in Q (light blue): If OPEC-11 + Russia 85% compliance, Libya/Nigeria increase slightly and US shale continue climbing % compliance, Libya and Nigeria on hold, EIA US Million barrels % compliance, moderate return Libya and Nigeria Q2017 2Q2017 3Q2017 4Q2017 1Q2018 9

10 Mission failed by Q (light blue): If OPEC-11 + Russia compliance 65%, Libya/Nigeria increase production to normal levels and US shale increase faster % compliance, Libya and Nigeria on hold, EIA US 200 Million barrels % compliance, moderate return Libya and Nigeria 65% compliance, fast return Libya and Nigeria, higher US shale Q2017 2Q2017 3Q2017 4Q2017 1Q

11 Expected Brent price ranges up to the end of OPEC deal Q USD 44-53/b USD 53-58/b i peak driving season 58 USD per barrel USD 53-57/b USD 50-55/b to driving season kicks off USD 55-61/b inventories decline as OPEC cuts materilaise 42 Source. Bloomberg and Nordea Markets 11

12 Exit strategy do we need one? OPEC expects that the sharp investment cuts will take a toll on capacity growth USD per barrel

13 If the market is still flooded with oil in Q1-17 and OPEC returns to market share strategy then oil prices could go for another dive USD per barrel Source: Bloomberg and Nordea Markets

14 Takk! Thina Margrethe Saltvedt, Chief Analyst Macro/Oil (Ph. D.) Nordea Markets er det kommersielle navnet på Nordeas internasjonale kapitalmarkedsaktiviteter. Opplysningene her er bare for diskusjonsformål og for bruk av mottakere som materialet er rettet mot. Opplysningene er utarbeidet av og gjenspeiler Nordea Markets nåværende vurdering. Dette dokumentet er ikke en utfyllende beskrivelse av produktet eller dets risiki. Det gis ingen garanti for at opplysningene er nøyaktig eller komplette. Opplysningene er ikke ment å være og er ingen råd om investering og skal heller ikke ses på som et tilbud eller en oppfordring til kjøp eller salg av et finansielt instrument. Opplysningene her tar ikke høyde for mottakerens økonomiske situasjon eller investeringsbehov. Det må alltid innhentes relevante og profesjonelle råd før man tar en investerings- eller kredittbeslutning. Tidligere resultater gir ingen garanti for fremtidige resultater. Nordea Markets er ikke og skal ikke ses på som rådgiver for så vidt angår juridiske, skattemessige, regnskapsmessige eller lovbestemte forhold i et rettsområde. Dette dokumentet skal ikke gjengis, distribueres eller offentliggjøres uten skriftlig forhåndsgodkjennelse av Nordea Markets.