Wednesday, April 27, 2011

Monday, April 18, 2011

Crude Oil and Liquids Capacity Additions: 2011-2015

This is a crosspost from The Oil Drum.

This analysis is designed to demonstrate why we believe that productive capacity relative to consumption will be sufficiently tight over the next several years to elevate crude prices to the investment cost of the marginal unit, about $100 per barrel. In fact, if annual non-OECD demand continues to grow at 3.5 percent or 1.4 Mb/d per annum, we expect another episode of deficit comparative inventory that will elevate spot prices above this mid-cycle price.