Skip to main content

Shell market overview

Hydrocarbon Engineering,


Global economic growth

  • According to the IMF, global economic growth was 3.3% in 2014.
  • The IMF estimated that the eurozone’s GDP grew by 0.8% in 2014. US growth was 2.4%. Chinese growth slowed from 7.8% in 2013 to 7.4%.
  • The average GDP growth rate for emerging markets and developing economies fell to 4.4%.
  • Growth in 2014 fell short of the IMF’s forecast of 3.7% made at the beginning of 2014.
  • The IMF expects global economic growth to rise to 3.5% in 2015, but that would still be less than the annual average of 3.9% for the previous 10 years.

Global oil and gas demand and supply

  • Global oil demand rose by 0.7% in 2014, according to the IEA.
  • The IEA repeatedly revised down its oil demand growth estimate for the year from 1.4 million bpd in early 2014.
  • Demand grew in emerging economies, while remaining almost flat in advanced economies.
  • Shell estimate that global gas demand grew by approximately 1% in 2014, which is much lower than the average annual growth rate of approximately 2.5% in the past decade.
  • Shell believe that most of the growth in demand was in China and the USA, driven by power generation and industrial sectors.

Crude oil and natural gas prices

  • Looking ahead, substantial price volatility can be expected in the short to medium term.
  • Oil prices may strengthen if the global economy accelerates, or if supply tightens as a result of a deceleration in non-OPEC production growth due to current price weakness, in particular US light tight oil, or if supply disruptions occur in major producing countries.
  • Oil prices may weaken further if economic growth slows or production continues to rise.
  • Unlike crude oil pricing, which is global in nature, gas prices vary significantly from region to region.

Refining and petrochemical market trends

  • Industry refining margins were higher on average in 2014 than in 2013 in the key refining hubs of the USA and Singapore and were little changed in Europe.
  • In 2015, increased demand for middle distillates is expected to be a key driver of refining margins, supported by demand for gasoline in the middle of the year.
  • The overall outlook remains unclear due to continuing economic uncertainty, geopolitical tensions in some regions that could lead to supply disruptions and overcapacity in the global refining market.
  • The outlook for petrochemicals for 2015 is dependent on the growth of the global economy, especially in Asia, and developments in raw material prices.

Edited from report by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/special-reports/16032015/shell-market-outlook/


 

Embed article link: (copy the HTML code below):