Global Oil Supply and Demand Market: Outlook to 2030

  • ID: 4457572
  • Report
  • Region: Global
  • McKinsey Energy Insights
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As Global Oil Supply Proves Resilient to the Harsh Economic Conditions, Will Oil Prices Finally Recover Over the Next Three Years or Remain Permanently Depressed?

Combining data and insights from a suite of energy market forecasting models, this outlook focuses on the impact of key drivers on the pace and timing of oil price recovery, the evolution of regional oil production (including shale oil), and the economic implications of long-term market trends for oil supply and demand.

Our summary report is an abridged version of the outlook that covers all the major topics and introduces key charts.

Key Findings

1. OPEC behavior - OPEC reached full level of compliance with the output cut deal, however production growth in deal-exempt countries and NGLs is offsetting large part of the cuts, delaying market balancing

2. Mid-term oil recovery scenario - We expect the market to structurally tighten around 2020. LTO production should return to strong growth by that time, yet accelerated legacy production declines from the lack of upstream investment will likely help eclipse the oversupply

3. Long-term oil demand growth outlook - Long-term oil demand growth slows down, due to slower global GDP growth of 2.4-2.7% p.a. and decreasing oil intensity driven by energy efficiency and EV substitution

4. Long-term oil supply growth outlook - On the supply side, recent improvements in project cost savings are expected to be partially maintained, and translate to 15-20% reductions in project breakeven prices by 2030

5. Industry margins - The marginal cost of supply in the long-term is expected to be in the $60-70/bbl range, thanks to slow demand growth and cost improvements on the supply side

Purchase of this report includes 50+ Excel data tables to complement the tables illustrated in the report.

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Historical recap (2014-2017 YTD)

Analysis of the evolution of oil prices and oil supply-demand balance since the peak in 2014, including the drivers that led to a market oversupply and its later rebalancing

Key charts and tables:

  • Global oil demand
  • Non-OPEC oil production vs non-OPEC oil rig count
  • OPEC oil production
  • US shale oil production vs US shale oil rig count
  • OECD commercial inventory vs Brent future spread
  • FID-ed asset count
  • EIA Global oil market balance vs OECD commercial inventories
  • Brent crude futures forward curve, January vs June 2017

Medium-term market outlook (through 2021)

Presentation of demand and supply outlooks for the next 5 years, including key oil pricing scenarios and analysis

Key charts and tables:

  • Base case Brent scenarios from multiple agencies
  • Potential mid-term Brent spot price scenarios
  • Global liquids demand
  • Change in global liquids demand
  • Existing fields average annual decline rates in onshore conventional fields
  • Projected total production from projects FID-ed in each year (excl. OPEC Gulf, NA onshore)
  • North America shale oil production under base case scenario
  • OPEC crude and condensate production
  • OECD commercial crude and liquids inventory
  • Estimated OECD and non-OECD inventory withdrawals
  • Global oil market balance
  • Global crude and condensates supply
  • Key productivity factors
  • NA shale oil production

Long-term market outlook (through 2030)

Presentation of demand and supply outlooks through 2030, including structural shifts in oil market dynamics for the oil and gas industry

Key charts and tables:

  • 5 potential supply & demand scenarios
  • GDP growth
  • Oil intensity
  • Annualized liquids demand growth
  • Average annual decline rates by resource type
  • Change of share in total supply stack
  • Estimated average annual declines in all fields excluding OPEC Gulf
  • US shale oil production outlook
  • OPEC crude and condensate production
  • Non-OPEC production
  • Production cost
  • 2030 deep and ultra-deepwater pre-FID greenfield projects cost curve
  • Global oil supply growth
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