Market to be short oil from 2025 onwards, Occidental CEO at Davos
Jan 18, 2024
Vicki Hollub, President of Occidental Petroleum, speaks during Abu Dhabi International Progressive Energy Congress (ADIPEC), in Abu Dhabi, United Arab Emirates, October 2, 2023. REUTERS/Amr Alfiky/File Photo Acquire Licensing Rights

DAVOS, Switzerland, Jan 16 (Reuters) - The oil market could be heading for a supply crunch from 2025 onwards as oil exploration fails to keep pace with demand, Occidental Petroleum (OXY.N), opens new tab Chief Executive Vicki Hollub said on Tuesday.


Hollub, who spoke on the sidelines of the World Economic Forum in Davos, said U.S. WTI crude prices could trade in the $80-$85 a barrel range from 2025. Prices averaged about $78 a barrel last year.


"In the near term, the markets are not balanced; supply, demand is not balanced," Hollub said, adding that: "2025 and beyond is when the world is going to be short of oil".


Hollub said that from the mid-1950s to the late 1970s, oil companies were finding around five times as much oil as was used, a ratio that has steadily declined to about 25% in 2023.


She said that from 2012, U.S. oil companies moved away from exploration and focused on tapping shale oil reserves, which have a much shorter lifespan than conventionally produced oil.


She added that she expected energy transition scenarios will have to be adjusted to accommodate for more oil exploration.

"I think the industry is looking at a scenario where we will be able to do all the things that we need to do as a part of the transition".


The market will move from near term oversupply, to a long period when the world is going to need more oil, she added.


Reporting by Dmitry Zhdannikov in Davos Writing by Ahmad Ghaddar in London Editing by Mark Potter


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U.S. crude oil exports reached a record in 2023

By Emalee Springfield • 02 Apr, 2024
U.S. crude oil exports established a record in 2023, averaging 4.1 million barrels per day (b/d), 13% (482,000 b/d) more than the previous annual record set in 2022. Except for 2021, U.S. crude oil exports have increased every year since 2015, when the U.S. ban on most crude oil exports was lifted . Growth in crude oil production in the United States has supported increases in U.S. crude oil exports. In 2023, crude oil production reached a record-high 12.9 million b/d in the United States, a 9% (1.0 million b/d) increase from 2022. Many U.S. refineries are optimized to run heavy, sour crude oils , but most of the crude oil produced in the United States is light, sweet crude oil, creating export incentives for market participants. The top regional destinations for U.S. crude oil exports since 2018 have been Europe as well as Asia and Oceania. Europe became the top export destination in 2023 following the effects of Russia’s full-scale invasion of Ukraine and the inclusion of West Texas Intermediate (WTI) crude oil in Dated Brent. In 2022, U.S. crude oil exports to Europe increased significantly following Russia’s full-scale invasion of Ukraine and subsequent EU sanctions banning imports of seaborne crude oil from Russia (adopted June 3, effective December 5). These effects of the sanctions contributed to continued growth in U.S. exports to Europe in 2023. In 2023, U.S. crude oil exports to Europe averaged 1.8 million b/d, slightly more than U.S. exports to Asia and Oceania of 1.7 million b/d. Another factor affecting the volume of U.S. crude oil exports to Europe is the inclusion of WTI crude oil in Dated Brent, a European crude oil benchmark. Prior to May 2023, the price of Dated Brent was determined based on a basket of different European crude oils. Starting in May 2023 (for physical delivery in June), WTI cargoes delivered to Rotterdam were included, likely attracting additional volumes to Europe. 

US drillers add most oil and gas rigs in a week since September

By Emalee Springfield • 18 Mar, 2024
March 15 (Reuters) - U.S. energy firms this week added the biggest number of oil and natural gas rigs in a week since September, with the oil rig count also rising to its highest in six months, energy services firm Baker Hughes (BKR.O) said in its closely followed report on Friday. The oil and gas rig count, an early indicator of future output, rose by seven to 629 in the week to March 15. Despite this week's rig increase, Baker Hughes said the total count was still down 125 rigs or 16.6% below this time last year. Baker Hughes said oil rigs rose six to 510 this week, their highest since September, while gas rigs rose one to 116. The oil and gas rig count dropped about 20% in 2023 after rising by 33% in 2022 and 67% in 2021, due to a decline in oil and gas prices, higher labor and equipment costs from soaring inflation and as companies focused on paying down debt and boosting shareholder returns instead of raising output. U.S. oil futures were up over 13% so far in 2024 after dropping by 11% in 2023. U.S. gas futures , meanwhile, were down about 33.7% so far in 2024 after plunging by 44% in 2023. Despite lower prices, spending and rig counts, U.S. oil and gas output was still on track to hit record highs in 2024 and 2025 due to efficiency gains and as firms complete work on already drilled wells. Reporting by Scott DiSavino in New York and Anjana Anil in Bengaluru Editing by Marguerita Choy View on the Reuters Website
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