Feb 27, 2018

The crude oil "supply gap" risk

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A big question among oil experts these days is whether today's worldwide investments in new supplies are too low to avoid risk of a "supply gap" opening up in the early 2020s as demand grows and existing fields decline.

The big picture: Two competing views presented this week offer a pessimistic and optimistic take on the situation, taking on opposite sides of the investment debate.

Fresh warning: The head of one of the world's largest oil-and-gas companies says the surge in U.S. crude production is not enough to prevent problems from emerging in a few years.

  • “Even if the U.S. shale oil is dynamic, we do not invest enough in this industry,” Total CEO Patrick Pouyanné says on the new episode of the Columbia Energy Exchange podcast.
  • He says under-investment in recent years is still a problem in 2018.
  • “Post-2020, the price will go high, because we will have a lack of capacity, and even with the shale oil dynamic, the global production of oil will be not enough. We are under-investing,” Pouyanné says.

Don't worry so much: A research note this week from Barclays analysts, however, suggests that these types of concerns are likely misplaced.

  • They argue that even with declines from mature fields, there has been enough new supply coming online from 2011–2017 even outside OPEC and U.S. shale to nearly offset it. And they don't see that changing.
  • "In the next couple of years, projects that have already received a green light are coming online and will further mitigate those declines. That means that the ‘mature base’ of non-OPEC non-US supply is flat from now through at least 2022, and it leaves OPEC liquids, US tight oil, Canadian oil sands, and non-crude liquids available to meet incremental demand growth," they write.

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Coronavirus dashboard

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  1. Global: Total confirmed cases as of 10 p.m. ET: 1,014,673 — Total deaths: 52,973 — Total recoveries: 210,335Map.
  2. U.S.: Total confirmed cases as of 10 p.m. ET: 244,678 — Total deaths: 5,911 — Total recoveries: 9,058Map.
  3. 2020 updates: The Democratic National Committee said its July convention will be postponed until August because of the coronavirus. A federal judge declined to delay Wisconsin's April 7 primary election.
  4. Jobs latest: Coronavirus unemployment numbers are like a natural disaster hitting every state.
  5. Public health latest: Anthony Fauci called for all states across the U.S. to issue stay-at-home orders. The FDA will allow blood donations from gay men after 3-month waiting period, citing "urgent need."
  6. Business latest: Treasury Secretary Steven Mnuchin said oil companies are eligible for aid from new lending programs the Federal Reserve is setting up, but not direct loans from his department.
  7. U.S.S. Theodore Roosevelt: Navy removes captain of aircraft carrier who sounded alarm about coronavirus.
  8. 1 future thing: In developing countries, consequences of COVID-19 could be deeper and far more difficult to recover from.
  9. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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Mark Meadows considers new White House press secretary

Photos: Alyssa Farah, Defense Department; Stephanie Grisham, Alex Wong/Getty Images; Kayleigh McEnany, Scott W. Grau/Icon Sportswire via Getty Images

White House Chief of Staff Mark Meadows has privately discussed bringing on Pentagon spokesperson Alyssa Farah or Trump campaign spokesperson Kayleigh McEnany as a new White House press secretary, two sources familiar with the talks tell Axios.

Why it matters: Meadows' start on Tuesday as Trump's new chief presents a chance to overhaul a press shop that's kept a low profile since President Trump ended the tradition of daily press secretary briefings.

CNN: Fauci advises all states issue stay-at-home orders

Dr. Anthony Fauci listens to President Trump speak during a briefing on April 1. Photo: Win McNamee/Getty Images

Director of the National Institute of Allergy and Infectious Diseases Anthony Fauci recommended on Thursday that all states across the U.S. implement stay-at-home orders, at a CNN town hall.

Why it matters: The recommendation stands in contrast to President Trump's calls for "flexibility." Nearly 4o states have issued stay-at-home orders to promote social distancing as a way to combat the novel coronavirus — but the orders vary in strictness and duration.

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