Houston, November 30, 2010
Purvin & Gertz announces the release of a new study, the 2010 Global Crude Oil Market Outlook. This service represents Purvin & Gertz’ analysis of the world crude oil and condensate markets and provides production outlooks for all major crude oil or condensate producing countries and over 300 individual commercial streams. Trade forecasts are focused on the flow of export-oriented crude oil and condensate streams to the major world regions. Price forecasts are provided for regional benchmark crudes as well as other significant commercial streams in more than 60 global locations. The GCOMO complements other Purvin & Gertz’ multi-client services utilizing the same economic, energy and petroleum demand outlooks.
Key conclusions of this year’s analysis include:
• Near-term future oil supply increases will be a combination of non-OPEC and OPEC producers – Robust supply increases from non-OPEC producers such as Russia, Kazakhstan, Canada and Brazil will be mirrored by expected large production capacity increases from Angola, Nigeria and Iraq. This is will result in no appreciable change in OPEC’s market share until after 2015.
• Current OPEC capacity appears sufficient to meet incremental oil demand under a range of supply scenarios through 2020 – Under our base petroleum demand assumption; spare capacity among OPEC producers is large enough to cover potential shortfalls from expected high growth areas.
• Global crude slates will trend towards being heavier and more sour – Heavy crude oil supply increases and incremental light sour capacity among OPEC producers will result in global crude slates trending towards lower gravity and higher percentages of sulfur.
• More heavy crude oil to the rescue at an average rate of 250,000 B/D annually – New developments in Brazil’s Campos Basin and Colombia are expected to partly compensate for declines from traditional Latin American heavy sour producers Mexico and Venezuela. Canada and the Middle East are other regions expected to see increases in heavy sour crude oil supply.
• European refiners will be faced with significant changes in the availability of traditional crude supplies – The outlook for declining North Sea production and Urals availability will require reliance on other forms of imports. BTC and CPC Blends will see large increases in available export volumes, but the overall quality of these barrels are not a fit for the current regional refining configuration and product demand needs. A shift in crude oil trade balances for the region will be required to offset these issues of quality differences and available supplies.
• Heavy crude imports to Asia expected to increase markedly – The majority of the heavy crude oil imports to Asia are expected to reside in India and China where higher conversion refineries are located or are being planned for future construction. This is also consistent with the two countries’ NOC’s investing in upstream projects in Brazil and Venezuela.
• Crude light/heavy price differentials are forecast to remain near current levels for the next several years before expanding after 2015 – Current refining markets have surplus conversion (cracking and coking) capacity, which is resulting in narrow crude light/heavy price differentials.
About Purvin & Gertz
Purvin & Gertz is an independent energy consulting firm providing technical, commercial and strategic advice. Purvin & Gertz specializes in servicing clients involved in the production, processing, transportation and marketing of oil, natural gas and gas liquids, and petroleum products. Headquartered in Houston, the firm consists of an international network of offices in Buenos Aires, Calgary, Dubai, London, Moscow and Singapore. Purvin & Gertz is an employee-owned consulting company, independent of any parent company, engineering firm, equipment manufacturer or process licensor. Please contact Geoff Houlton at +1-713-331-4000 for more information.