1. OPEC releases monthly report with optimistic forecast.
In OPEC's latest monthly report released today, the oil cartel said it expects demand to grow at 1.2 million barrels per day (mb/d), "well above" the 1.0 mb/d averages seen in the past decade. This report comes on the heels of the recent commitment by OPEC and 11 other oil producing countries to limit their production, in an attempt to drive oil prices back up. Also in the report, it stated that in January, OPEC production decreased by 890,000 barrels per day, according to secondary sources. Keep in mind this is all coming from “their” report, and you wouldn’t expect them to forecast otherwise at this point.
2. Oil and gas discoveries are down.
According to the latest findings from research group IHS Markit, oil and gas discoveries are down at least 50%. They reported that only 174 discoveries were recorded last year, compared to the 400-500 per year average that we’ve experienced for the previous 4 years. This slowdown could mean a couple things. One, it could very well be a normal cycle in the oil and gas exploration sector – especially due to the fact that multiple exploration companies have struggled to make ends meet over the last few years. Two, it could mean large oil companies are turning their focus to more unconventional resources such as US Shale oil to meet future demand. Whatever the reason, it’s worthwhile to note because generally a decrease in discoveries means tighter supply 5-10 years down the road.
3. Ludin discovers promising deposit in the Southern Barents Sea.
Swedish oil firm Lundin Petroleum ( LNDNY) announced the discovery of a large oil and gas reserve in the Filicudi prospect in the main well 7219/12-1 along the southern Barents Sea. The new discovery is estimated gross somewhere in the range of 35-100 million barrels of oil equivalents. The news sent Ludin’s stock price up nearly 2% on Monday.