Founder & CEO. Oil markets macro-analysis., Vanda Insights

Vandana Hari

Founder & CEO. Oil markets macro-analysis.

Vanda Insights

Vanda Insights is a Singapore-based boutique provider of intelligence on the global energy markets, launched in September 2016. The venture was born out of a desire to extract the signal from the noise in the complex and often volatile oil markets. Our succinct and clear macro analysis is relied upon by thousands of readers globally, including those doing business directly or indirectly in the physical commodity and derivatives markets; wealth managers; governments, regulatory bodies and think-tanks; as well as trade organizations and educational institutions.

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Tightening supply fundamentals are starting to take centre-stage in the oil market, and briefly sent crude to a four-month high last week. But just as Brent crossed $68 during intraday trading and market watchers began to wonder if it was going to breach $70, the benchmark slipped down a few notches. Crude’s jagged ascent has become a feature since the start of this year, making every upward surge feel tentative. The selling pressure that seized the crude market in the fourth quarter of last year is not yet done. Every rally seems to have plenty of skeptics waiting to sell into it.Aside from OPEC’s output curbs, which surpassed 100% compliance in February, production from at least two producers not bound by quotas is under threat. Crude output in Venezuela, crippled by a major power outage for more than a week now, has plummeted, while the US says it wants to force Iranian crude exports to below 1 million b/d when the current batch of sanctions waivers expire at the start of May. A US-China trade deal looks certain, even though the signing may be pushed back to April...or maybe June. However, economic worries elsewhere continue to weigh on oil market sentiment and demand growth expectations.OPEC appears determined to stay the course with its production cuts in conjunction with its non-OPEC allies. But it sees non-OPEC supply growth this year dwarfing demand growth by nearly 1.1 million b/d, and is feeling the burden of rebalancing the market once again on its shoulders.This week, we also discuss: <ul>
<li>What jumped out at us in the IEA’s annual report</li>
<li>US EIA lowering its production forecasts</li>
<li>WTI Houston’s emergence as US crude benchmark</li>
</ul>We note the controversial decision by Norway’s sovereign wealth fund to unwind its holdings in the upstream oil and gas sector, a topic we will be tackling in the next edition of Weekly Oil Views.

Tightening supply fundamentals are starting to take centre-stage in the oil market, and briefly sent crude to a four-month high last week. But just as Brent crossed $68 during intraday trading and market watchers began to wonder if it was going to breach $70, the benchmark slipped down a few notches. Crude’s jagged ascent has become a feature since the start of this year, making every upward surge feel tentative. The selling pressure that seized the crude market in the fourth quarter of last year is not yet done. Every rally seems to have plenty of skeptics waiting to sell into it.Aside from OPEC’s output curbs, which surpassed 100% compliance in February, production from at least two producers not bound by quotas is under threat. Crude output in Venezuela, crippled by a major power outage for more than a week now, has plummeted, while the US says it wants to force Iranian crude exports to below 1 million b/d when the current batch of sanctions waivers expire at the start of May. A US-China trade deal looks certain, even though the signing may be pushed back to April...or maybe June. However, economic worries elsewhere continue to weigh on oil market sentiment and demand growth expectations.OPEC appears determined to stay the course with its production cuts in conjunction with its non-OPEC allies. But it sees non-OPEC supply growth this year dwarfing demand growth by nearly 1.1 million b/d, and is feeling the burden of rebalancing the market once again on its shoulders.This week, we also discuss: 
What jumped out at us in the IEA’s annual report
US EIA lowering its production forecasts
WTI Houston’s emergence as US crude benchmark
We note the controversial decision by Norway’s sovereign wealth fund to unwind its holdings in the upstream oil and gas sector, a topic we will be tackling in the next edition of Weekly Oil Views. 

Weekly Oil Views: Crude Rallies to Four-Month High but Lacks Staying Power

The US government's Energy Information Administration just turned even more bullish with its prediction on tight oil production from the country's shale plays. That is surprising because the agency's oil output forecasts have been criticised as overly optimistic by some prominent industry veterans since last year. The crude futures markets have been discounting the optimistic growth projections for several months now, resisting a bearish tilt from the spectre of booming US supplies. US crude production, two-thirds of which comes from the shale basins, is expected to spike by 1.38 million b/d -- the highest year-on-year growth in its history -- to average 10.7 million b/d in 2018, the EIA said in its latest monthly Short Term Energy Outlook released March 6. The February forecast had pegged the growth at 1.3 million b/d.Shale was the centre of attention during CERAWeek, a major annual oil industry event in Houston, Texas, over March 5-9. OPEC officials and energy ministers were in town for dialogue with the shale producers in an effort to understand their plans and prospects. Silicon Valley heavyweights such as <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a> and <a href="https://www.smartkarma.com/entities/409" target="_blank" data-smartkarma-citation="entities:409:1">Amazon.com Inc (AMZN US)</a> were in attendance, among others, for a special session on innovation and technology, a nod to the cutting-edge technologies and data analytics being deployed by the shale producers. US shale industry veterans such as Mark Papa and Harold Hamm, however, continue to disagree with the shale boom narrative: US oil production growth is likely to be moderate, falling short of the most optimistic projections, according to them. Papa founded shale producer <a href="https://www.smartkarma.com/entities/11153" target="_blank" data-smartkarma-citation="entities:11153:1">Eog Resources Inc (EOG US)</a> and is now at the helm of newcomer <a href="https://www.smartkarma.com/entities/26442" target="_blank" data-smartkarma-citation="entities:26442:1">Centennial Resource Develo-A (CDEV US)</a>. Hamm pioneered the development of the Bakken Basin in North Dakota and now heads up EOG Resources. What do they know that the shale growth optimists don't?We analysed the plans, prospects and challenges in the US shale sector from information shared in the producing companies' quarterly reports (Q4 2017), analyst calls, industry presentations and senior executives' public comments to conclude that the spectacular growth as projected by the EIA is far from certain. Our base-case, what we would call a business-as-usual scenario as far as shale is concerned, is for an annual growth of 600-800,000 b/d in 2018. More towards the lower end of that range.

The US government's Energy Information Administration just turned even more bullish with its prediction on tight oil production from the country's shale plays. That is surprising because the agency's oil output forecasts have been criticised as overly optimistic by some prominent industry veterans since last year. The crude futures markets have been discounting the optimistic growth projections for several months now, resisting a bearish tilt from the spectre of booming US supplies. US crude production, two-thirds of which comes from the shale basins, is expected to spike by 1.38 million b/d -- the highest year-on-year growth in its history -- to average 10.7 million b/d in 2018, the EIA said in its latest monthly Short Term Energy Outlook released March 6. The February forecast had pegged the growth at 1.3 million b/d.Shale was the centre of attention during CERAWeek, a major annual oil industry event in Houston, Texas, over March 5-9. OPEC officials and energy ministers were in town for dialogue with the shale producers in an effort to understand their plans and prospects. Silicon Valley heavyweights such as Alphabet Inc Cl C (GOOG US) and Amazon.com Inc (AMZN US) were in attendance, among others, for a special session on innovation and technology, a nod to the cutting-edge technologies and data analytics being deployed by the shale producers. US shale industry veterans such as Mark Papa and Harold Hamm, however, continue to disagree with the shale boom narrative: US oil production growth is likely to be moderate, falling short of the most optimistic projections, according to them. Papa founded shale producer Eog Resources Inc (EOG US) and is now at the helm of newcomer Centennial Resource Develo-A (CDEV US). Hamm pioneered the development of the Bakken Basin in North Dakota and now heads up EOG Resources. What do they know that the shale growth optimists don't?We analysed the plans, prospects and challenges in the US shale sector from information shared in the producing companies' quarterly reports (Q4 2017), analyst calls, industry presentations and senior executives' public comments to conclude that the spectacular growth as projected by the EIA is far from certain. Our base-case, what we would call a business-as-usual scenario as far as shale is concerned, is for an annual growth of 600-800,000 b/d in 2018. More towards the lower end of that range.

US Shale: Boom or BAU? The Latter, Most Likely!

United States

Permian Resources Corporation operates as an oil and gas company. The Company focuses on the development of unconventional oil and associated liquid-rich natural gas reserves in the Permian Basin, as well as offers geology, engineering, and drilling services. Permian Resources serves customers in the United States.

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Permian Resources (PR US)

Weekly Oil Views: Crude Rallies to Four-Month High but Lacks Staying Power

Tightening supply fundamentals are starting to take centre-stage in the oil market, and briefly sent crude to a four-month high last week. But just...

Vandana Hari

US Shale: Boom or BAU? The Latter, Most Likely!

The US government's Energy Information Administration just turned even more bullish with its prediction on tight oil production from the country's...

Vandana Hari

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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