| 摘要 | Brent crude prices have fallen by more than 30 percent from a four-year peak of $86 a barrel at the start of October to reach $59 by the end of the third week of November. As outlined in a recent CSIS commentary, current market conditions are a complex combination of supply, demand, geopolitical events, and sentiment, with numerous factors contributing to the sell-off, many of which go beyond oil. Among these dynamics, the United States has played an important role in the direction that market has taken as of recent. Politically, it has exerted significant influence by way of sanctions on Iran and through its relationship with Saudi Arabia, at a time when domestic production growth has continued to soar. This analysis takes a deeper look at the way in which expectations for U.S. production and U.S. sanction waivers have contributed to changing the market outlook over the course of the past two months and how the United States may continue to play an important role in influencing oil market dynamics moving forward.
Click to Expand One of the many components that played a role in the price correction and in fomenting a bearish outlook has been the phenomenal growth in U.S. production, which has continued to far outpace forecasts made by the Organization of the Petroleum Exporting Countries (OPEC) and the U.S. Energy Information Agency (EIA). For more than a decade, oil market analysts have struggled to keep pace with U.S. production in their outlooks. During the 2014 price downturn, the resiliency of U.S. tight oil production surprised many, and when prices rose, its rate of growth was consistently underestimated. The most recent production numbers continue to run counter to the narrative that growth rates would slow considerably due to infrastructure bottlenecks in the second half of 2018. According to the latest monthly figures from the EIA, U.S. crude oil production in August now stands at an astonishing 2.1 million b/d above where it stood just a year ago. In November’s Short-Term Energy Outlook (STEO), the EIA revised upward crude production figures for August by 295 thousand b/d and now expects October crude output to stand at 11.4 million b/d—430 thousand b/d more than was anticipated just a month earlier. Annualized U.S. crude oil production growth is on track to reach 8 percent this year, exceeding the 6 percent rate of growth in 2017 — though less than the 15 percent increases seen between 2012 – 2014 when prices exceeded $100 a barrel.
Click to Expand Despite the challenges that U.S. producers have faced in terms of takeaway capacity constraints (in addition to other factors such as a tight labor market), U.S. supply growth by production numbers at first glance would appear unimpeded. Prices, however, tell a different story where the growth in differentials between, for example, WTI Midland and WTI Cushing, as well as the ballooning of the Brent-WTI spread (see below), illustrates the challenge of not only getting the crude to hubs for export but also finding a buyer in a market increasingly awash with light oil. While these constraints have affected prices, the impact on production levels for the moment has been limited with producers finding work-arounds by simply putting more oil on rail and truck and finding international buyers when the discounts break out far enough. However, WTI’s most recent decline could possibly constrain growth rates, especially if prices remain at current levels for an extended period. In certain cases, this price level will result in a netback to producers that is no longer economic.
Click to Expand Since September’s STEO, the EIA has revised upward total U.S. production numbers for the second half of 2018 by 570 thousand b/d and 2019 output by 670 thousand b/d. The upward revision of U.S. supply numbers represents 70 percent of the total 810 thousand b/d upward revision made to global output for 2H-2018 and 136 percent of the upward revision to the 2019 forecast (see chart below). Overall, the total amount of U.S. liquids supply increases year-on-year is expected to average roughly 2.2 million b/d in 2018 and 1.6 million b/d in 2019; these numbers represent 90 percent and 80 percent respectively of the forecast net increases in global supply for the same periods. To put this another way, at present, U.S. supply increases are on track to meet more than 140 percent of the global increase in demand for 2018 and are expected to satisfy 85 percent of the increase in 2019.
Click to Expand Beyond domestic production growth, the United States has exerted influence in the recent trajectory of the oil market through sanctions on Iran. In the run-up to the implementation of sanctions, President Trump publicly demanded that Saudi Arabia increase its output, while eventually issuing multiple sanction waivers. This has resulted in Iran’s exports running higher than what the Kingdom and many others expected. The expectation now is that exports will continue to run at over 1 million b/d until the current 180-day waiver period ends. Beyond this period, the administration has made it clear that it will seek to ratchet up the pressure on Iran, but at the same time, President Trump has continued to highlight his reluctance to push oil prices higher. This creates additional uncertainty in the outlook, as once again, the administration will have significant sway over how many Iranian barrels will hit the market come April 2019.
The combination of these U.S. supply increases and higher than expected Iranian exports, spell more work for Saudi Arabia and OPEC in their attempts to balance the market. These dynamics have contributed towards pushing OECD commercial petroleum inventories back above the five-year rolling average in October (see chart below), OPEC’s target for restoring market balance as outlined by Khalid Al-Falih at the Meeting of the OPEC Conference in Vienna last year. Inventories are still well within the five-year range and remain below the five-year seasonally adjusted moving average. However, the forecast build of approximately 1 million b/d in the first half of 2019 would see inventories move above this average again on both a nominal basis and in terms of days of supply coverage. As a result, OPEC is now contemplating a decision to cut production by more than 1 million barrels a day in 2019.
Click to Expand Orchestrating such cuts comes at a difficult period for OPEC-plus and Saudi Arabia in particular. The Trump administration has put unprecedented public pressure on the Kingdom to backstop its policy of removing Iranian barrels from the market and has continued to call for lower prices beyond where they currently stand. At the same time, bilateral relations between the United States and Saudi Arabia have come under intense scrutiny and pressure resulting from the Khashoggi revelations. President Trump has since come out in defense of the relationship, which has created a wave of speculation as to whether Saudi Arabia will follow through on the cuts. The other complicating factor is that the current market imbalance—which in large part has been created by phenomenal U.S. shale production increases—is reminiscent of the dilemma that OPEC faced in the wake of the 2014 price crash, whereby any intervention to reduce supply was seen as an enabler for greater levels of U.S. output. While Saudi Arabia appears undeterred by this prospect, Russia has been more hesitant to make a commitment to intervene in the market just yet.
The United States has wielded significant influence in oil markets as of late. The U.S. decision to issue waivers to several importers of Iranian oil, while continuing to pressure the Kingdom to put more oil on the market was an important supply-side driver in the recent price decline. This supply surge was further aided by domestic production growth in the United States, which ironically, is the factor the administration has the least control over. Even on the demand side, the United States is responsible for the growth in bearish sentiment by way of the trade war, which it has taken on against China. Whether these politically driven factors of U.S. influence in the market will be a short-term phenomenon or something more lasting, remains to be seen. However, the frantic pace of U.S. production increases and the difficulties exhibited in forecasting its rate of growth, which has caused consternation in oil markets and for OPEC-plus, is a dynamic we have unlikely seen the end to just yet.
Andrew Stanley is an associate fellow with the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C. |
