The oil market has undergone some substantial changes since the last World Oil
Outlook (WOO) was published in early November 2014. Prices fell from above
$80/barrel then to the mid-40/b range in January. Although they recovered in the
first half of 2015 to around $65/b, further volatility saw prices drop and then
fluctuate in the third quarter. The market instability has led to a number of projects
being deferred or cancelled altogether, rig counts falling dramatically, costs being
squeezed and redundancies being made. And the supply and demand balance in
2015 has been one of oversupply, with stock levels rising to well above the five-year
average. Despite this market instability, OPEC has continued to be an efficient,
reliable and economic supplier of oil.
The past year has been a test for all producers and investors, who have had to
face up to the realities of a shifting global oil industry. It begs the questions: what
lessons can the industry take away from the past 12 months or so, and how might
these recent events alter the outlook for the oil market in the years and decades
ahead. This year’s WOO aims to examine a number of issues surrounding these
questions, as it considers developments in the global economy and the outlook for
supply and demand in both the upstream and downstream, by timeframe, region
and sector.