Crude-by-rail shipments 'likely to enjoy a renaissance': IEA

Peter Castro
March 9, 2018

"But as we've highlighted repeatedly, the weak global investment picture remains a source of concern". Production declined steadily from 1985 to 2008, rebounded from 2008 to 2015, and declined again in 2016.

USA oil production has been booming in recent years, in areas like North Dakota to the Northeast. Since the salad-and-chicken dinner last March, US output has risen roughly 1.1 million barrels a day-the equivalent of Opec member Libya.

The United States will be the largest oil producer in the world by 2023, the International Energy Agency said Monday. And the set to become part of the top five global crude exporters, according to consultant Wood Mackenzie Ltd. Because of investments in pipelines and other infrastructure to ease the current bottlenecks, domestic crude export capacity is forecast to hit almost 5 million b/d by 2020. As specified in the IEA's Oil Market Report, the deterioration of the situation in Venezuela and the positive macro scenario could push the demand for crude oil.

The Port of Corpus Christi's strategic goals include providing surface infrastructure and services in support of maritime and industrial development. Last year, the United States surpassed Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries. There is major infrastructure construction in Texas, lots of pipelines.

Smith adds that while we concur that floating storage off the coast of Iran has been drawn down (something that was nearly complete by April of last year), the reports of the demise of floating storage off Singapore appear greatly exaggerated.

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The shipments are significantly higher than the current record of 179,000 barrels a day reached in September 2014 before oil prices collapsed. They have already outpaced Saudi Arabia and are close to outpacing Russian Federation, which is now number one in the world in terms of crude oil production. By 2023 the level of spare production capacity that could be used in the event of a disruption will be the lowest since 2007. With non-OPEC supply rising quickly, particularly in the U.S., OPEC may struggle to figure out a way to increase output without pushing down prices, according to the IEA's analysis. The cartel faced off against the US shale industry in 2014 by keeping the taps open and allowing a crude oil glut to build. Saudi Arabia specifically said at the time that it was not prepared to curtail its own production and allow USA shale producers to fill in the gap.

The EIA in their new annual report believes that over the next three years, the US will cover 80% of the world's demand growth. Environmentally minded Chinese energy policies encourage the use of commercial vehicles that burn natural gas, and growth in gasoline demand is expected to slow. However, it will inevitably drive up costs for the nation's oil and gas producers. In fact, Asia's oil imports are expected to grow by 3.5 million barrels a day through 2023, primarily due to Asian economies like China starting to refine more crude oil at local refineries.

"It strengthens the case for a potential trade war", George Wilkes, an analyst at Sucden in London, told S&P Global Platts. In 2017, US crude production averaged 9.3 million barrels a day for the entire year.

"Global oil trade routes are moving East, as China and India replace the United States as top oil importers".

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