Past oil spending could make for oil glut next year: Goldman Sachs.
What the energy industry did years ago when oil prices topped $100 a barrel could soon create an oil glut.
The market saw record oil and natural-gas exploration and production spending around the time crude prices traded above $100 in 2011. Now it’s poised see the results of that hit the market. A sizable glut of supplies expected as early as next year.
Oil and natural-gas “mega projects production” in 2017 to 2019 are “likely to see the largest increase in history. The record 2011-13 [capital expenditures] commitment yields fruit.” The “long-lead-time wave of projects and a short-cycle revival, led by U.S. shales, could create a material oversupply in 2018-19,” said analysts at Goldman Sachs.