A look at oil market supply, demand and development over the next five years
The oil and gas industry is in turmoil. A downturn in crude oil markets has taken a bumpy path, resulting in declining oil prices and leading to deep CAPEX spending reductions. Although sizeable capital and operational budget cuts could leave a lasting impact, Deloitte analysis delves into that future to provide beneficial insights.
Deloitte reviews recently released market data and examines changes in oil supply and demand, in light of lower price expectations, and discuss the net effect these could have on future oil prices over the next five years.
In this report, we examine:
- The growing list of canceled development projects;
- New production still expected to come online;
- Increased Iranian production resulting from the lifting of sanctions;
- Current and future demand outlooks;
- A comparison of Deloitte MarketPoint’s Reference Case outlook to the forward curve.
The analysis in this paper represents only one of a vast number of possible scenarios for the future of oil. The exercise isn’t meant to predict future prices and flows but more to discuss the impact future fundamentals could have on prices. Deloitte advocates the development of numerous scenarios based on quantitative analysis to develop a range of potential outcomes that can help strategic planning teams develop robust business plans.