The International Energy Agency (IEA) reported in 2018 that the United States became the world’s largest producer of oil, surpassing that of rival oil producers Saudi Arabia and Russia. Additionally, the United States also became a net exporter of oil in 2018, a distinction not held in 75 years. With US production ramping up and global demand continuing to rise, the US will soon become the world’s largest exporter of oil and supplier of global energy.
US daily oil exports currently at 3.6 million barrels per day is expected to nearly triple to 9 million barrels a day by 2024.
During this period global demand is expected to witness significant increase primarily fueled by emerging and developing economies rapid technology-driven growth with the risk of global energy demand exceeding global output unless action is taking now.
The United States is forecast to provide 70 percent of the rise in global oil production and 75 percent of the rise in natural gas by 2024. This dramatic shift in supply growth will witness financial windfalls for US producers and their partners which will exceed that witnessed by the middle east in the 1970s and will have profound and dramatic implications for the geopolitics of energy.
The transportation sector will remain the largest consumer of oil while global population powerhouses China and India will witness automobile ownership rise from a combined 200 million cars to over 735 million cars in the decade ahead.
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In recent weeks, Exxon Mobile, British Petroleum and Chevron Phillips all announced a significant increase in production in their efforts to meet future global demand. In 2018, IEA warned of global shortfalls unless producers invest now to meet demand.
The International Energy Agency (IEA) announced last week that they expect global oil demand will rise by 1.4 million barrels per day in 2019. Global oil demand Q4 2018 rose by 1.4 mb/d year-on-year setting up 2019 for continued global rise in demand. Most of the expected rise in 2019 demand will be from the United States, China and India which together account for 1.19 mb/d of the 1.4 mb/d 2019 forecast rise.
Global supply declined in January 2019 by 1.4 mb/d partially due to Venezuela supply cuts and sanctions. World wide oil prices rose in January 2019 with prices expected to continue to rise as the northern hemisphere moves into the high demand season the spring and summer.
Crude oil quality is another issue affecting the markets, particularly those with the supply of heavy , sour oil, which is used for diluents and blending. Venezuela typically produces heavy oil and global prices are expected to witness further rise while heavy oil supply declines. At the moment, no indication the Saudi’s will raise production to meet this shortfall. Overall, demand will remain firm for 2019 with US and it’s producers leading the way to meet this continued rise in global demand.
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Crude oil setting up for upside breakout of huge multi-year consolidation pattern which dates back to 2003. Similar but smaller patterns occurred in 2011 which resulted in the 2014 downside break and subsequent decline in prices of $79, reaching a low of $25.75 in 2016 and again an even smaller pattern in 2017 which witnessed the 2018 upside break and $36 rally to 77.06, just a few cents above the 76.63 target I called for in my 2018 forecast.
These patterns always occur after a trending market and always proceed a breakout.
There is a very reliable and direct correlation between the duration of the consolidation pattern and the length and momentum of the subsequent breakout.
For example, the 2011-2014 pattern resulted in a breakout price move of $79, whereas the 2016-2017 much smaller pattern resulted in a modest $36 price move.
I have been trading these patterns with 100% accuracy for almost 30 years and formulated very specific mathematical calculations and rules to accurately forecast the timing of these breakouts along with their all-important price targets. For example, Spot Gold and the British Pound were both in a similar patterns back in 2011 and my analysis at that time https://www.fxlivetrader.com/forecast-for-2011-eurusd-gbpusd-spot-gold/ accurately predicted gold to rally from $680 to $1,904. The actual high was $1,920, just $16 higher than the price target I predicted months earlier.
Crude oil is in the final stages of a 20-year developing pattern that will witness an explosive and dramatic price move supported by high volume futures trading and global oil demand. And unlike the dramatic rise and fall in oil prices witnessed in 2008, this go around will witness a steady and sustained rise in prices fueled by emerging market demand to grow their rapidly developing and advancing economies. As a result of this unprecedented demand, oil producers worldwide will not be able to keep up with demand as recovery, refinery and delivery capabilities will all reach maximum utilization. Oil prices will steadily rise as oil will remain the dominant energy source well into 2050.
As to price targets, please take a minute to watch my short 15-minute video at the link below.
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Crude Oil 2019 Outlook
Crude Oil Set to Breakout of 20 Year Pattern