Energy markets the short and the long term Christof Rühl, Chief Economist, BP BP 2012
Outline The economy A year of disruptions Long term implications Conclusion
Global growth: slow and on life support 12% 10% 8% 6% 4% 2% 0% 2013 GDP and the good old days Annual change, % Eurozone Japan US Brazil China India Source: includes data from Thomson Reuters Datastream Avg 2002-07 Non- OECD World OECD Trillion $US* Central Bank liquidity % of world GDP Fed + ECB + BoJ (rhs) *At constant 2011 exchange rates
Europe struggles into recession Volume index Eurozone indicators % 10-year benchmark bond yields % per year Source: includes data from Thomson Reuters Datastream
The US grows slowly Components of domestic demand Index: 1Q 2007=100 Fiscal cliff Budget deficit, % of GDP Government Investment Additional debt service Lower revenues (extending current tax brakes) Higher spending Source: includes data from CBO August 2012 forecast and Thomson Reuters Datastream
The Chinese economy slows Exports Commercial bank loans % y-o-y, 3m ma. Change y-o-y, trillions of CNY % y-o-y Short-term Medium & long-term Source: includes data from Thomson Reuters Datastream
Energy in 2011 disruptions and continuity Supply disruptions GDP and energy growth Mtoe Annual change, % Arab Spring Fukushima Source: includes data from Oxford Economics
Energy prices $/boe Energy prices Annual change, % 2011 price changes Source: includes data from Platts and McCloskey
The Fukushima Adjustment
Natural gas markets in 2011 Production and consumption growth Annual change, Bcm $/Mmbtu Regional gas prices Source: includes data from Platts
US natural gas market Bcm Production Gas share in power generation Shale gas Source: includes data from Energy Information Administration
Global gas trade Bcm Gas exports LNG import growth in 2011 Annual change, Bcm From Qatar From Atlantic Basin Source: includes data from Cedigaz, GIIGNL, CISStats, Poten, Waterborne
Coal prices and trade $/tonne Steam coal prices Annual change, Mtoe Import growth in 2011 From Indonesia From Russia From US From Colombia From other Source: includes data from McCloskey, Eurostat, IHS CERA *China, India, Japan, South Korea, Hong Kong, Taiwan
Natural gas demand growth is concentrated in the non-oecd Bcf/d Demand Supply 470 420 370 320 Other N. America Other India China Mid East 2030 level Other Africa Australia Mid East Other N. America FSU Mid East 270 2010 OECD Non-OECD 2010 LNG Pipeline Energy Outlook 2030 14 BP 2012
Unconventional gas will play a growing role Gas supply by region Bcf/d North America Bcf/d Europe Bcf/d China Energy Outlook 2030 15 BP 2012
Oil markets and trends
Crude oil prices $/bbl 150 100 Dated Brent $/bbl 130 115 100 Dated Brent and WTI Dated Brent WTI 50 0 Dated Brent Annual averages 2007 2008 2009 2010 2011 2012 85 70 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Source: includes data from Platts
Oil production growth in 2011 Mb/d Decline Increase Non-OPEC OPEC Saudi Arabia
Oil consumption growth in 2011 Kb/d Largest changes Kb/d Regional growth by fuel type
Oil consumption and production Mb/d World liquids demand and supply Mbbls OECD commercial oil stocks 35 Mbbl SPR release Source: includes data from Energy Information Administration and Monthly Oil Data Services OECD/International Energy Agency June 2012
US supply Annual change, Kb/d US supply Rigs US rig counts *Texas and North Dakota Source: includes data from Energy Information Administration and Baker Hughes
Limits to oil consumption growth % of global demand Subsidised consumption $/bbl Vehicle fuel economy Litres/100km for new sales Source: includes data from the International Council for Clean Transportation and the US Environmental Protection Agency * Includes light trucks
Global liquids demand and supply Mb/d Demand Supply Other S&C Am Mid East India China 2030 level Oil Sands Biofuels Brazil US Other Iraq Saudi NGLs Energy Outlook 2030 23 BP 2012
Liquids supply growth - OPEC and North America Mb/d Liquids supply by type OPEC share (rhs) Mb/d Growth from 2010 to 2030 Other Saudi Arabia Iraq NGLs Brazil US Shale Oil Biofuels Canadian Oil Sands Other RoW Energy Outlook 2030 24 BP 2012
The long term: energy security
Impact of oil prices on the economy % GDP 2011 net oil import bill Mb/d Net oil imports Source: includes data from the International Monetary Fund
Regional energy imbalances Europe FSU N. America Mid-East China Key: Billion toe Gas Oil Coal S. & C. America Africa India Other Asia Pacific Net importers Net exporters Source: includes data from the International Monetary Fund
Import dependency rises in Asia and Europe Billion toe India China EU27 US Import share of respective fuel 42% 80% 47% 91% 80% 94% 40% 6% 57% 32% 1990 2010 2030 1990 2010 2030 1990 2010 2030 1990 2010 2030
Long-term trends Shares of world primary energy Trillion bbls Oil and gas reserves Tcm Oil Coal Gas Hydro Nuclear Renew.
Conclusion Key to the 2011 response: flexible markets Medium term: supply response, inter-fuel substitution and trade optimisation Long term: Global integration and its perils
Energy markets the short and the long term Contact: report@tky.ieej.or.jp The back issues are available at the following URL http://eneken.ieej.or.jp/en/whatsnew/jpoiel.html BP 2012