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Analysts on US oil market under next Administration

Oil&Gas Materials 25 August 2016 12:58 (UTC +04:00)
US oil supplies are likely to be more robust under a Republican Administration, while demand is potentially much weaker under a Democratic Administration.
Analysts on US oil market under next Administration

Baku, Azerbaijan, Aug.25
 
By Aygun Badalova - Trend:
 
US oil supplies are likely to be more robust under a Republican Administration, while demand is potentially much weaker under a Democratic Administration, analysts of the US JP Morgan bank believe.
 
“Both outcomes would present a challenge to prices in the medium term, but the refining industry will likely face a tougher environment if the Democratic Administration succeeds in its attempt to reduce oil demand by one third in the coming decade,” analysts said in a report, obtained by Trend. 
 
Analysts also noted that the oil market remains gripped in the rebalancing process that is a consequence of the collapse in oil prices following the shale oil shock of 2014.
 
The rebalancing process, they said, will continue in the coming quarters but, on the margin, will interact with changes in the regulatory landscape that the next US Administration will enforce.
 
JP Morgan analysts believe that the prospects for US oil demand and supply through the end of the decade will be largely determined by three intertwined factors: oil price; oil industry’s ability to consistently innovate to reduce both the capital and operational cost of developing conventional and unconventional resources; and the health of the US economy to support oil demand. 
 
According to the US Energy Informationa Administration (EIA), US oil production averaged 9.4 million barrels per day in 2015.
 
EIA estimates that crude oil production for July 2016 averaged 8.6 million barrels per day, almost 0.2 million barrels per day below the June 2016 level, and 1.1 million barrels per day below the 9.7 million barrels per day reached in April 2015.
 
Production is forecast to average 8.7 million barrels per day in 2016 and 8.3 million barrels per day in 2017.  
 

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