Our annual Energy User Group Meeting discussed the key challenges and developments for oil, shipping, natural gas, LNG, power and carbon markets.
From the cyclical recovery in oil prices to the impact of recent hurricanes on energy infrastructure, our European customers explored a wide range of topics at this year’s Energy User Group Meeting in London.
The full day event was divided into two parts. The plenary session, hosted in the morning, was opened by Leigh Henson, Global Head of Commodities, Customer & Supply Chain Risk, at Thomson Reuters who delivered a welcome speech that explored major themes in global energy markets in 2017.
Some key takeaways included the following stats from the IEA:
- The IEA now expects oil demand growth of 1.5 million barrels/day in 2017, slowing to 1.3 million barrels/day in 2018
- In 2017, year-to-date average quota compliance among OPEC members is 87%
- Non-OPEC supply growth will accelerate in 2018 driven by the U.S., Brazil and Canada
- Crude production in the U.S. will increase from 370,000 barrels/day in 2017 to 790,000 barrels/day in 2018
- After two years of unprecedented decline, global upstream investment is up by 3% in 2017
David Linton, CEO and founder at Updata, highlighted the likely sentiment and technical drivers for energy prices in the months ahead, particularly in relation to energy contracts.
John Kemp, Senior market analyst for Commodities & Energy at Reuters, delivered a presentation on oil pricing. Some key takeaways included:
- Cyclical recovery is underway and set to continue in 2018/19
- Spot prices will continue trending higher
- Calendar spreads will continue tightening
- Crude and products stocks will continue to draw down
- OPEC will allow the market to tighten too much rather than risk not tightening enough
- Shale output will continue to grow as prices rise above US$60
- Hedge fund positioning poses risk of a sharp correction
- Biggest risks come from macroeconomic or trade shock
The plenary session was concluded by a presentation from Thomas Walsh and George Müller from the Weather Research & Forecasts Team at Thomson Reuters.
The afternoon was divided into three key sessions focusing on market specifics for: Oil, Natural Gas & LNG, and Power & Carbon.
The Oil breakaway session was moderated by Shakil Begg, Global Head of Oil Research at Thomson Reuters. The session covered key industry topics including:
- The crude oil supply outlook
- Transatlantic clean product flows after the U.S. hurricane season
- An overview of the distillate market
- The fuel oil market with an emphasis on 2020 marine fuel regulations
Natural Gas & LNG
The Natural Gas & LNG breakaway session was moderated by Rukes Ahmed, Global Head of Power, Gas & Carbon at Thomson Reuters. The session was of significant interest for attendees as global energy demand places added importance on gas markets.
The session covered key industry topics including global market dynamics, key trends and outlook for the LNG industry, price dynamics, spreads and volatility in European gas markets, and a recent history and outlook for winter base load supply in Northwest Europe.
Power & Carbon
The Power & Carbon breakaway session was moderated by Ben Trotter, Head of Content Management for Commodities at Thomson Reuters. The session was broad in scope, covering numerous areas of interest for Thomson Reuters customers.
Key topics covered included the new I-SEM power market in Ireland, pricing forecasts for the UK power market; the winter outlook for the coal Industry; a quantification of policies for the German power market; and the recent Phase 4 agreement for the EU Emissions Trading Scheme (ETS).
The Thomson Reuters Energy User Group Meeting is a proprietary event that allows our customers to directly interact with our Research & Forecasts Team while also networking with their industry peers.