London’s main week of oil industry meetings has been a shadow of its former self for the past three years, but appears to have bounced back strongly this year in terms of the reach and volume of market participants at the city
That’s according to analysts at Standard Chartered, who made the claim in a new report sent to Rigzone this week.
“London Oil Week includes a series of official events, brought together under the label International Energy Week by its organizer, the Energy Institute,” analysts noted in the report.
“However, we believe that at least 95 percent of visitors do not join the official program, they come to events organized by oil companies, consumers, stock exchanges, market data providers and the financial sector,” the analysts added.
In the report, the analysts revealed that they have repeatedly heard three comments in particular from various sectors during the “unofficial oil and gas events” that they believe are worth noting.
“One, global oil demand will reach a record high this year; second, oil prices will be determined in 2023 by what happens to Russian supply and Chinese demand; and three, Europe will have trouble replenishing gas inventories without cheap Russian gas,” the analysts said.
Looking at the first comment, Standard Chartered analysts noted in the report that they agree that global oil demand will reach a record high this year, but added that they disagree with the implication that to extract that a maximum record. demand points to historic high prices.
Focusing on the second comment, the analysts noted in the report that they acknowledge that supply from Russia and demand from China are important, but added that they think that “the 85 percent of global demand that does not it is China and 90 percent of the world supply that is not Russia are more important”.
“In short, while China and Russia are indeed key elements, we believe that basing a market view on these elements alone is too simplistic,” the analysts said in the report.
Looking at comment three, analysts noted that they disagree with this.
“According to data from Gas Infrastructure Europe (GIE), EU inventories stood at 71.4 billion cubic meters (bcm) on February 26, a record for the time of year and up 37.9bcm on the ‘year,” the analysts said in the report. .
“Inventories have risen relative to the five-year average for 16 consecutive days, and now stand 25.3 bcm above that average. Time is running out for further storage draws; the draw total from this point to the end-of-season low was just 4.5 bcm last year and 7.8 bcm on the five-year average pattern,” the analysts added.
“Last year the minimum was reached on March 19, while the five-year average minimum point is March 31. The rate of extraction has already slowed significantly, with the average for the last week at just 289 million cubic meters per day (mcm/d); the highest weekly average this winter was 903 mcm/d (week to January 19) and the average was 619 mcm/d in late January,” the analysts continued.
In the report, Standard Chartered analysts said their other objection to commenting on three “is that, in our view, there has never been such a thing as cheap Russian gas.”
“The hidden price was in terms of limiting European foreign policy and creating a political environment in which the threat to Russia’s territorial ambitions was minimized,” the analysts added.
“We see no appetite among the governments of the EU’s biggest gas consumers for any future dependence on Russian gas, regardless of the nominal price charged,” the analysts continued.
The Energy Institute’s International Energy Week took place from 28 February to 2 March at the Intercontinental London Park Lane.
Over three days of keynotes, panel discussions and networking, the week attracts more than 1,000 delegates from around the world and culminates with the prestigious International Energy Week Dinner, the event’s website notes . This year’s International Energy Week was described on the site as the global conference focused on transitioning out of the geopolitical and environmental crises facing energy. Speakers at the 2023 event included BP CEO Bernard Looney, Petronas Group Chairman and CEO Tengku Taufik and Energy Institute President Juliet Davenport.
In a statement published on the Energy Institute’s website in January last year, International Energy Week 2022 was described as a hybrid conference focused on accelerating the global energy transition. The statement notes that the event builds on the legacies and strengths of IP Week.
In a statement posted on its site in January 2021, the Energy Institute revealed that its IP Week 2021 event would be held virtually for the first time in its history.
To contact the author, please send an email andreas.exarcheas@rigzone.com
