Heading into Thanksgiving, it’s a great week to reflect on the state of industry as we approach what is expected to be a non event: the OPEC meeting December 5th. Prognosticators are looking towards the compliance level to the cuts rather than the absolute level themselves but one thing is for sure: no one can agree on what demand or supply looks like next year. Let’s have a look, starting with demand.

The world uses approximately 100 mmbo/d- having grown by 1.5 mmbo/d for each of the last 10 years (US consumes 20 mmbo/d, of which 70% is used in transportation). If you believe the stock market- it doesn’t look like a recession is around the corner so I’m inclined to agree with the IEA forecast projecting 1 mmbo/d growth YOY. 30 TCF of NG was used in ‘18, 35% for electricity.

On to supply- NG producers have shown their willingness to keep drilling At $2.50 but the 30% rig drop in the Marcellus since the end of Q3 made me, for one, raise my eyebrows. Canada is expected to decline next year. I even read a report that was bullish on NG (defined as being $2.80…).

On oil- I’ve been pretty clear about my view on US growth and it applies to Canada too. So growth has to come from outside NA. Could it? Yes. Will it? That will determine price in 2020.