Bob Tippee 2011 Mid-Year Forecast

Uploaded on

On June 23rd, 2011

On June 23rd, 2011

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads


Total Views
On Slideshare
From Embeds
Number of Embeds



Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

    No notes for slide


  • 1. Oil & Gas Journal Midyear Forecast - 2011
    Bob Tippee, Editor
    Oil & Gas Journal
    Energy Advocates
    June 23, 2011
  • 2. World oil demand
    OECD down slightly at 45.9 MM b/d; non-OECD up 3.5% at 43.4 MM b/d
  • 3. World oil supply
    Non-OPEC: 53.3 MM b/d (+1.1%)
    OPEC NGL: 5.9 MMb/d (+10.2%)
    Stock change: -300 M b/d
    OPEC crude: 29.8 MM b/d (+1%)
  • 4. Second-half problem (MMb/d)
  • 5. The OPEC story
    World needs 30 MM b/d of OPEC crude in 2H
    OPEC production:
    29.9 MM b/d average 1Q
    29.2 MM b/d in May
    OPEC June 8 meeting
    Split interests: haves vs. have-nots
    No quota adjustment
    Unilateral production hikes by S. Arabia, others
  • 6. IEA today: tapping strategic stocks
    Release 60 MM bbl in next month (2 MM b/d)
    North America 50%, Europe 30%, Asia 20%
    “…contribute to well-supplied markets and to ensuring a soft landing for the world economy” (Executive Director Nobuo Tanaka)
    Total storage: 1.6 billion bbl
    Reassess in 30 days
    In market by July; Saudi oil can take 3 months
  • 7. Effect of IEA action
    2 MM b/d jolt of supply
    Brent and WTI quickly dropped by 7%
    Muted (so far) condemnation from OPEC
    Policy shift: market lever vs. emergency supply
  • 8. Price wild cards
    Saudi response to IEA stock draw
    Economic response – especially crisis economies of Europe
    Dollar vs. Euro
    Demand response
    Trader worries about shrunken cushions (inventories and idle production capacity)
  • 9. Spare production capacity (EIA)
  • 10. OECD stocks
  • 11. US oil price
    WTI discount to Brent was almost $20/bbl yesterday (June 22).
  • 12. US energy demand
    Assumes real GDP growth of 2%
    Federal Reserve yesterday lowered GDP growth projection for 2011 to 2.7-2.9% from 3.1-3.3% in April
    Fed raised unemployment rate projection to 8.6-8.9% from 8.4-8.7% in April
  • 13. US oil demand
  • 14. US demand for key products
  • 15. US gas price
    WTI:HH price ratio 22:1 yesterday (June 22) vs. BTU ratio of 6:1
  • 16. US demand for gas
  • 17. US gas production
  • 18. US gas imports
    Canada -9%
    Mexico -83.%
    LNG -7%
  • 19. Treasury: Percentage depletion=subsidy
    “The President agreed at the G-20 Summit in Pittsburgh to phase out subsidies for fossil fuels so that the United States can transition to a 21st-century energy economy. Percentage depletion effectively provides a lower rate of tax with respect to a favored source of income. “
  • 20. The Close the Big Oil Tax Loophole Act
    Foreign tax credit for dual-capacity taxpayers
    Domestic production deduction (Sect. 199)
    Current-year expensing of intangible drilling costs (IDCs)
    Percentage depletion
    Deduction for qualified tertiary injectants