U.S. Oil & Gas Industry Chartbook

Transcription

1 U.S. Oil & Gas Industry Chartbook BBVA Research USA Houston, TX March 215 DISCLAIMER This document was prepared by Banco Bilbao Vizcaya (BBVA) BBVA Research U.S. on behalf of itself and its affiliated companies (each BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. Within the US, BBVA operates primarily through its subsidiary Compass Bank. The information, opinions, estimates and forecasts contained herein refer to the specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources, believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.

2 Bottom Line The drastic fall in oil in prices continues to remain at the forefront of economic activity, with the potential for faster economic growth (via higher consumption) Although prices appear to be stabilizing, the continued imbalance between supply and demand is expected to keep oil prices low in the short-run There are downside risks for energy-dependent industries and states, such as Texas, but there will ultimately be a rebalancing among states and regions The decline in oil prices is a net positive to the U.S. economy, benefiting consumers and energy-intensive industries

3 Oil Prices 3

4 Spot Prices U.S. Crude Oil and Natural Gas Spot Prices (avg, $/bbl & $/MMBTU) U,.S economy expands 2.9% between Great Recession U.S. production of crude oil goes from 4.9 million B/D to 9 million B/D WTI (lhs) Natural gas (rhs) Source: Haver Analytics 4

5 Spot Prices U.S. WTI Spot Price (avg, $/bbl) China reports faster GDP growth U.S. sanctions to Russia Eurozone GDP flat in Q2 14 due to shock contraction in Germany Libyan production increases by more than 3% from June 214. Iraqi production increases by 24% from previous year. EIA cuts its oil price forecasts OPEC announces weaker demand U.S. production reaches record high Rig count falls to lowest level since July Saudi Arabia refusal to boost production 2 WTI at $49.61 as of March 6, 215 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Source: Haver Analytics 5

6 Prices WTI Historical and EIA Forecast ($/bbl) Forecast Projections are generated by simulation of the EIA Regional Short-Term Energy Model Source: Energy Information Administration/ Haver Analytics 6

7 Futures Prices WTI Futures ($/bbl) st expiring contract (nearby) 3-month 6-month 2-year 2-month 4-month 1-year Source: Haver Analytics 7

8 Exchange Rate WTI ($/bbl) and U.S. Dollar Exchange Rate (Mar-73=1) WTI 2 Real Broad Trade-Weighted Source: Haver Analytics 8

9 Breakeven Prices Breakeven Oil Prices for MENA Oil Exporters, 215 Projections ($/bbl) Fiscal Current Account Algeria Bahrain Iran Iraq Kuwait Libya Oman Qatar Saudi Arabia UAE Yemen Source: IMF Middle East and Central Asia: January 215 Update 9

10 Global Supply & Demand 1

11 Supply and Demand Global Oil Supply and Demand Balance (MMbbl/day) month MA Source: Haver Analytics 11

12 Production Crude Oil Production (Mbbl/day, yoy % change) 25% 2% OPEC U.S. Other Non-OPEC 15% 1% 5% % -5% -1% Source: Haver Analytics 12

13 Supply by Region Worldwide Production in 213 (share of total, %) Proved Crude Oil Reserves in 213 (share of total, %) 19% 2% 14% 1% 9% 8% 9% 2% 32% 2% 48% 9% North America Central and South America Europe Middle East Africa Asia Pacific North America Central and South America Europe Middle East Africa Asia Pacific Source: 214 BP Statistical Review of World Energy & BP Energy Outlook

14 Reserves/Production Proven Reserves to Production Ratio in 213 (years) North America Central and South America Europe Middle East Africa Asia Pacific Source: 214 BP Statistical Review of World Energy 14

15 Demand Oil Product Demand for Selected Regions (MMbbl/day) China EU-15 U.S. LatAm Source: Haver Analytics 15

16 Forecast Oil Production Oil Consumption (million tonnes) (million tonnes oil equivalent ) Asia Pacific North America South & Central America Asia Pacific North America South & Central America Africa Europe & Eurasia Africa Europe & Eurasia Middle East 213 Middle East 235 Source: Haver Analytics with BP data 16

17 U.S. Supply & Demand 17

18 Production U.S. Crude Oil Field Production (MMbbl/day) Texas U.S Source: Haver Analytics 18

19 Production U.S. Active Rig Count Horizontal Vertical Source: Haver Analytics 19

20 Net Imports U.S. Production and Net Imports of Crude Oil (MMbbl/month) 35 Net Imports Production Source: Haver Analytics 2

21 Regional Impact U.S. Crude Oil Production by State in 214 (%) 2.4%.2% 31.6% 5.7% 2.2% 36.5%.9% 3.8% 12.6% 4.% Alaska Louisiana Montana New Mexico North Dakota Oklahoma Texas West Virginia Wyoming Other Source: Haver Analytics 21

22 Impact on U.S. Economy 22

23 Consumer Spending U.S. Average Retail Gasoline Price vs. Real Retail Sales and Food Services (yoy % change) 8% 8% 6% 6% 4% 4% 2% % 2% -2% % -4% -6% -2% -8% -4% Gas Price (lhs) -1% Sales (rhs) -12% -6% -14% Source: Haver Analytics 23

24 Consumer Sentiment Consumer Sentiment (NSA, q1-66=1) vs. Average Retail Gasoline Prices ($/gallon) Source: Haver Analytics Consumer Sentiment (lhs) Gas Price (rhs)

25 Vehicle Miles Traveled Gasoline Prices and Vehicle Miles Traveled (yoy % change, 6-month MA) 3.% 2.% 1.%.% -1.% -2.% -3.% Vehicle Miles of Travel (lhs) Gas Prices (rhs) 5% 4% 3% 2% 1% % -1% -2% -3% -4% -4.% -5% Source: Haver Analytics 25

26 Inflation WTI Spot Crude Price vs. CPI Urban Consumers (yoy % change) 12% 6% 1% 5% 8% 6% 4% 2% % -2% -4% WTI Spot Price (lhs) CPI (rhs) 4% 3% 2% 1% % -1% -6% -2% -8% -3% Source: Haver Analytics / NBER 26

27 Inflation WTI Spot Crude Price vs. Core Inflation (yoy % change) WTI (lhs) Core Inflation (rhs) WTI Spot Crude Price vs. Expected Inflation 5-Years Ahead (yoy % change) * WTI (lhs) Expected Inflation (rhs) Source: Haver Analytics *5-Year Nominal minus 5-Year TIPS Rate (%) 27

28 Regional Impact Severance Tax as a Share of State Revenue for Selected States in % 3% 25% 2% 15% 1% 5% % 14% 12% 1% 8% 6% 4% 2% Share of TX State & Local Revenue from Oil and Gas Industry* % Severance Tax: Tax imposed by state governments on the removal of nonrenewable resources such as crude oil and natural gas at their market value.. Source: Haver Analytics/ Pew Charitable Trusts *Includes property tax, sales and gross receipts, franchise tax, severance tax, and land income Sources: Haver Analytics, Texas Comptroller of Public Accounts, Texas Oil & Gas Association, BBVA Research 28

29 Texas Rig Count Texas Active Rotary Rig Count Source: Haver Analytics 29

30 Texas Employment Location Quotients % Location Quotients % Other Services Government Construction 18% 16% 14% 12% 1% 8% 6% 4% 2% % Manufacturing Trade, Transp & Utilities 8 Leisure & Hospitality Information 6 4 Educational & Health Services Professional & Business Svc Financial Activities 2 Oil & Gas Extraction Support Activities for Mining Source: Haver Analytics 3

31 Energy Industry 31

32 Debt High Yield Bonds (option adjusted spreads relative to U.S. treasuries) Energy Total 4 2 Source: Bloomberg 32

33 Stock Markets S&P Daily Stock Market Capitalization (Bill.$) S&P 5 (lhs) E&P Index (rhs) Source: Haver Analytics 33

34 Stock Markets Market Weightings, S&P 5, 215 % Historical S&P Weighting, Energy Sector 14% 12% 1% 8% 6% 4% IT Healthcare Industrials Energy Materials Financials Consumer Discretionary Consumer Staples Utilities Telecom 2% % Source: S&P Dow Jones Indices, Seeking Alpha 34

35 M&A Activity U.S. M&A Number of Deals and Volume Deal Count (lhs) Volume (rhs) 5E+1 4.5E+1 4E+1 3.5E+1 3E+1 2.5E+1 2E+1 1.5E+1 1E+1 5E Source: Bloomberg 35

36 U.S. Oil & Gas Industry Chartbook BBVA Research USA Houston, TX March 215 DISCLAIMER This document was prepared by Banco Bilbao Vizcaya (BBVA) BBVA Research U.S. on behalf of itself and its affiliated companies (each BBVA Group Company) for distribution in the United States and the rest of the world and is provided for information purposes only. Within the US, BBVA operates primarily through its subsidiary Compass Bank. The information, opinions, estimates and forecasts contained herein refer to the specific date and are subject to changes without notice due to market fluctuations. The information, opinions, estimates and forecasts contained in this document have been gathered or obtained from public sources, believed to be correct by the Company concerning their accuracy, completeness, and/or correctness. This document is not an offer to sell or a solicitation to acquire or dispose of an interest in securities.