Dallas Fed CEO pens essay on oil markets

By Staff | June 25, 2018

Robert Kaplan, president and CEO of the Federal Reserve Bank of Dallas, has produced an essay outlining his view of the oil market, titled “A Perspective on Oil.” Among the findings, Kaplan notes that since 2014, major oil companies have reduced capital expenditures. As a result, he says the global energy market has increased its dependence on future production growth from shale oil. Kaplan discussed the potential impacts on the shale industry and the U.S. economy in his essay, making several points, including: 

-global oil supply and demand is balanced 

-U.S. crude oil production will grow by more than 1 million bopd in 2018 to surpass 11 million bopd, second only to Russia 

-Since 2014, major oil companies have reduced their capital expenditures relating to long-lived projects. As a consequence of several years of lower investment spending on these projects, the global energy market has increased its dependence on future production growth from shale oil. 

-It is estimated that global oil demand is likely to increase from an average of 98.4 million barrels per day in the first quarter of 2018 to approximately 101.5 million barrels per day by 2020. World Bank and International Monetary Fund projections suggest that global demand growth will continue to be driven primarily by emerging-market economies. 

To view the full essay, click here.