New market study, "Israel Oil & Gas Report Q2 2011", has been published

April 25, 2011 - PRLog -- The latest Israel Oil & Gas Report from BMI forecasts that the country will account for 3.14% of Middle East (ME) regional oil demand by 2015, while making no appreciable contribution to rising oil supply. Middle East regional oil use rose to an estimated 7.4mn b/d in 2010. It should average 7.7mn b/d in 2011 and then climb to around 8.70mn b/d by 2015. Regional oil production was 22.83mn b/d in 2001 and averaged an estimated 24.90mn b/d in 2010. After an estimated 25.21mn b/d in 2011, it is set to rise to 27.24mn b/d by 2015. Oil exports are growing steadily, because demand growth is lagging the pace of supply expansion. In 2001, the region was exporting an average 17.85mn b/d. This total eased to an estimated 17.50mn b/d in 2010 and is forecast to reach 18.54mn b/d by 2015. Iraq has the greatest export growth potential, followed by Qatar.

In terms of natural gas, the region consumed an estimated 392bn cubic metres (bcm) in 2010, with demand of 482bcm targeted for 2015, representing 23.0% growth. Production of an estimated 467bcm in 2010 should reach 612bcm in 2015 (+31.0%), which implies net exports rising to 130bcm by the end of the period. Israel in 2010 consumed an estimated 0.69% of the region's gas, with its market share forecast at 1.45% by 2015. It contributed 0.21% to estimated 2010 regional gas production and, by 2015, will account for 1.14% of supply.

The 2010 full-year outturn was US$77.45/bbl for OPEC crude, which delivered an average for North Sea Brent of US$80.34/bbl and for West Texas Intermediate (WTI) of US$79.61/bbl. The BMI price target of US$77 was reached thanks to the early onset of particularly cold weather, which drove up demand for and the price of heating oil during the closing weeks of the year.

We set our 2011 supply, demand and price forecasts in early January, targeting global oil demand growth of 1.53% and supply growth of 1.91%. With OECD inventories at the top of their five-year average range, we set a price forecast of US$80/bbl average for the OPEC basket in 2011. The unprecedented wave of popular uprisings in the Middle East and North Africa (MENA) that followed the removal of Tunisian President Ben Ali on January 14 has obviously fundamentally altered our outlook, particularly since the unrest spread to Libya in mid-February.

Taking into account the risk premium that has been added to crude prices in response to actual and perceived threats to supply, we have now raised our benchmark OPEC basket price forecast from US$80 to US$90/bbl for 2011 and from US$85 to US$95/bbl for 2012. Based on our expectations for differentials, this gives a forecast for Brent at US$94/bbl in 2011 and US$99/bbl in 2012. We have kept our long-term price assumption of US$90/bbl (OPEC basket) in place for the time being while we wait to see what path events in the MENA region take. We have also retained our existing supply and demand forecasts until the scheduled quarterly revision at the start of April.

Israel's real GDP rose by an estimated 3.4% in 2010, with forecast average annual growth of 3.1% in 2010-2015. We expect oil demand to rise from an estimated 254,000b/d in 2010 to 273,000b/d in 2015, although the state would like to minimise dependency on imports and exploit fully the country's growing gas resources. A lack of serious upstream oil prospects and limited international oil company (IOC) participation mean Israel is likely to continue importing virtually all the oil needed to supply its domestic refineries. Israeli gas production is set to rise dramatically, providing self-sufficiency and the longer-term potential for exports, thanks to the Tamar and Leviathan finds. Gas imports could be as high as 2.5bcm per annum by 2011/12, before easing as domestic production volumes rise.

Between 2010 and 2020, we are forecasting an increase in Israeli oil consumption of 16.1%, with demand rising steadily from an estimated 254,000b/d to 294,000b/d by the end of the 10-year forecast period. Refining capacity between 2010 and 2020 is set to increase by 59.1%, reaching 350,000b/d by 2020. Gas production is expected to climb from an estimated 1bcm to a potential 12bcm. With 2010-2020 demand growth of 270%, this provides an import requirement peaking at 2.5bcm in 2011/12, before being replaced by rising domestic supply. Details of the BMI 10-year forecasts can be found in the appendix to this report.

Israel now shares second place with Qatar in BMI's composite Business Environment (BE) ratings, which combine upstream and downstream scores. The country holds fourth place in BMI's updated upstream Business Environment ratings, in spite of the state's limited upstream potential. Bahrain below has the medium-term potential to challenge for fourth place. Israel's score benefits from the lack of state involvement in the upstream segment, the licensing terms and privatisation progress, plus a healthy country risk outlook. The overall score is dragged down by limited oil resources and growth prospects. Israel currently tops the league table in BMI's updated downstream Business Environment rating, with a few high scores but limited potential to retain regional leadership over the longer term. It is five points ahead of Iran, thanks largely to excellent country risk factors that outweigh a modest showing in terms of oil/gas demand, oil demand growth and likely refining capacity expansion.

For more information or to purchase this report, go to:
-  http://www.fastmr.com/prod/149631_israel_oil_gas_report_q...

About Business Monitor International

Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at http://www.fastmr.com/catalog/publishers.aspx?pubid=1010

About Fast Market Research

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.

For more information about these or related research reports, please visit our website at http://www.fastmr.com or call us at 1.800.844.8156.

# # #

Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.