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Industry News

OPEC likely to drive near-term oil market as recovery lags: Scotiabank

The Scotiabank Commodity Price Index gained 2.2% m/m in February as industrial commodities continue to benefit from healthy demand on the back of a stronger global economic outlook, while supply-side idiosyncrasies continue to provide opportunity for differentiation. The oil market recovery remains on track but fragile, as OPEC headlines will continue to drive near-term market sentiment, especially ahead of the May 25th meeting to decide whether or not to maintain production cuts for another six months. 

"We're now in the third month of OPEC production cuts and compliance within the OPEC-11 has been surprisingly strong," said Rory Johnston, Commodity Economist at Scotiabank. "We believe that the combination of high OECD inventories, still-weak upstream investment outside the U.S. and recent oil price weakness will prompt OPEC to extend their production cap through the end of the year." 

Prices for North American benchmark WTI have been downgraded and are now forecast to average $53/bbl in 2017 and $56/bbl in 2018. Four key trends that will shape the oil market for the remainder of 2017 are OPEC output discipline; the pace of the U.S. shale response; non-OPEC production declines outside the continental U.S. and; the strength of consistently-underestimated global demand growth. 

Non-OPEC countries outside the U.S. and Canada remain a larger but slower-moving factor in future supply. However, recent strength in Brazilian production has offset broader weakness in the rest of this "other" category. This production group will be essential to meet future supply needs and is nearly equal to OPEC in size. 

Other highlights: 
  • U.S. shale continues strong rebound after market was flooded by supply and prices plunged in 2014, as U.S. crude production is on track to reach growth of 1Mbpd y/y by December. 
  • Copper forecasts have been upgraded to $2.50/lb in 2017 and $2.65/ln in 2018 as combination of production loss, continued supply uncertainty and potential for stronger Chinese demand are all near-term bullish for prices. 
  • Aluminium prices are forecast to average $0.85/lb in 2017 and 2018 as Chinese "blue sky" policies could remove substantial amounts of supply off the market, flipping balances to moderate deficit in 2017. 
  • Zinc continues to show strongest fundamentals with prices forecast to average $1.35/lb in 2017 and $1.55/lb in 2018. 
  • Nickel supply received potential shock as Philippines President Duterte raised possibility of banning all domestic mining activity. Prices are now forecast to average $5.00/lb in 2017 and $5.50/lb in 2018. 
  • Gold prices are likely to average $1200/oz in 2017 and $1250/oz in 2018 given a mix of mildly bearish interest rate fundamentals and a balanced risk outlook.

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Offshore Technology

Companies connect to create unique model for FLNG industry

Add Energy, an international energy consultancy provider, has partnered with Transborders Energy (TBE) and joined forces with TechnipFMC and MODEC to create a unique and fast deployment business model for the FLNG (floating liquefied natural gas) industry that will free up small-scale stranded resources around the world and establish a new concept in global gas field development.

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Drilling & Production

Selecting the Right Solid Tires for Industry Specific Applications

Approximately twenty years ago, those of us working in the off-road heavy equipment industry regularly witnessed a high amount of failures in machines operating on cement or other hard surfaces. Extended steel rims were used with small, hard, rubber wheels. When these rubber tires chipped and chunked, vibrations and bouncing sent shockwaves into the machine, causing shortened life and expensive repairs, not to mention stress on operators. Drivetrain components (U-joints and articulation joints) in particular often suffered from stress cracks caused by vibrations and a bouncing machine. 

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Cat to offer UTVs starting in 2018

Cat to offer UTVs starting in 2018

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FLO Components celebrates first winner in 40th Anniversary giveaway

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Sage Oil Vac Launches All-New NextLube Monitor System

Sage Oil Vac, a leader in professional lube equipment, has announce the launch of its NextLube monitor system. While it might not be large in size, the all-new NextLube monitor system promises huge improvements in productivity and ease of use. The intuitive NextLube touch screen panel delivers a straightforward presentation of information to any job as an optional add on for Sage Oil Vac lube trucks and trailers. NextLube will display the gallons within the tanks, instead of the percentage, making the process easier for the technician to determine the amount of oil available to complete an exchange.

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Drilling & Production

Churchill sees demand for dart-less activation

Churchill sees demand for dart-less activation

Churchill Drilling Tools has seen a growing demand for its technology with a record number of dart activations in August 2017. Operators are increasingly trusting Churchill's darts to activate downhole devices, with the company announcing the launch of a dart-less version of its Self Filling Float, the popular time-saving tool for running in hole in deep water drilling programs.  

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Instrumentation, Systems & Automation

Honeywell expands gas measurement solution portfolio

Honeywell Process Solutions has expanded its portfolio of integrated gas measurement solutions in the U.S. The company is now offering the standard Honeywell Elster RABO meter combined with a mechanical totalizer or instrument drive (ID), along with the direct-mounted Honeywell Mercury Instruments TCI temperature corrector or EC 350 volume corrector. This combination will deliver advanced measurement, control, and analysis technology from a single source, and thus reduce costs and integration challenges for customers.

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