Bayerngas Norge

Go to content

Our market view - week 49

Released - Last updated


Supply growth will outweigh demand next year



Brent crude is rising on signs of reviving growth in China, the world’s second largest oil consumer, and supply concerns triggered by tension in the Middle East. The HSBC PMI for November showed growth in China’s manufacturing sector for the first time in 13 months. Prices are also supported by the tensions in the Middle East, such as hostilities between Israel and Palestine, fresh political unrest in Egypt and the conflict in Syria. Brent crude rose 2.3% in November.

The US Senate on Friday approved expanded sanctions on global trade with Iran’s energy and shipping sectors. Some experts expressed doubt that a fresh round of sanctions will prompt Iran to make concessions on the nuclear issue.

Russian oil production rose to 10.5 mbd, a new post-Soviet high, in November. Next year, non-OPEC supply will expand faster than oil demand, reducing the demand for OPEC production. OPEC spare capacity will increase as output is cut, which should lower the floor for Brent prices. However, the continuing unrest in the Middle East will keep the risk premium in oil prices.


UK gas consumption rose by 24% last week with colder weather. Still, spot gas prices remained stable as increased system flexibility offset rising demand. Total UK gas demand is down by 9% this year, mainly due to reduced gas use in the power sector. Despite weak demand, uncertainty in the supply situation has pushed prices higher since the summer.


  UK gas demand, mcm/d (National Grid data)