Mazama Science Clean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012

Oil and Gas Trends

Educated guesses about future prices.

Jonathan CallahanMazama Science

MAZAMA SCIENCE

Data – Information – Knowledge

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Oil is a global market.

Oil is a globally traded commodity.

Humans use +/- 85 million barrels per day.

Some nations are net oil exporters, others net importers.

Mazama Science Clean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 3

Top oil exporting nations:

Not many free market democracies.

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

OPEC

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Top oil importing nations:

US per capita consumption is 10x that of China.

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The US is the #1 oil importer.

We import more crude oil than we produce.

Mazama Science Clean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 6

China is the #2 oil importer.

As nations develop, consumption rises rapidly.

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India is the #5 oil importer.

When will Indian consumption slow down?

Mazama Science Clean and Green Energy Forum, Dana Point, CA, Dec 3-4, 2012 8

Factors affecting long term prices:

Demand in developing nations is rising rapidly.

Demand in OECD nations is falling slowly.

Global exporters are “not our people”.

Over 2-20 years: upward pressure on oil prices

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Natural Gas is a local, seasonal market.

The US natural gas market is mostly landlocked.

Americans use +/- 65 billion cubic feet per day.

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The US is the #1 natural gas consumer.

We are approaching zero net imports.

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Natural gas storage provides a seasonal buffer.

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Gas in storage has a strong seasonal cycle.

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This past winter,storage didn't empty out.

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Forecast says “full” is more likely than “empty”.

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Factors affecting short term prices:

In recent years, storage is trending toward “full”.

Forecast says “full” is more likely than “empty”.

Storage is largely determined by weather.

BUT!! Climate & weather are inherently unpredictable.

Over 2-20 months: downward pressure on nat. gas prices