Oil Market Waiting For A Catalyst

Robert Boslego - INO.com Contributor - Energies


On November 15th, Saudi Energy Minister Khalid al-Falih said, “We need to recognize that by the end of March we’re not going to be at the level we want to be which is the five-year average, that means an extension of some sort.”

He went on to say that Saudi Arabia favors making an extension decision at the OPEC meeting at the end of this month. “My preference is to give clarity to the market and announce on November 30 what we’re going to do.”

At the conclusion of the last OPEC meeting in May, the Saudi minister had stated that the current production quotas will “do the trick” of rebalancing stocks to normal levels within six months. Earlier this month, the DOE projected that global OECD stocks at end-2017 would be right where they were at end-2016. And it projected that 2018 inventories will be higher, not lower.

Russia’s continued participation seems to be a linchpin, and the Russian energy minister, Alexander Novak, reportedly met with Russian oil producers about their view of extending the production deal. According to TASS, everyone but Gazprom Neft agreed to a six-month extension, not the nine-month extension favored by Mr. Al-Falih. Gazprom Neft expects to launch new projects in 2018. Continue reading "Oil Market Waiting For A Catalyst"

Analysis Of Hurricane Harvey Impacts On The U.S. Oil Industry

Robert Boslego - INO.com Contributor - Energies


Information from the Gulf of Mexico is developing each day, and the extent of damage from Harvey to the energy industry’s infrastructure is still largely unknown as of September 5th. I detail below the potential impacts on supply and demand for crude and petroleum products. I have also contrasted them to supply/demand responses to Hurricane Katrina (2005) followed by Hurricane Rita.

Crude Production

The best data show that about 324,000 b/d is shut down in the Gulf of Mexico (GOM). Also, up to 300,000 b/d of inland production may be affected in Eagle Ford.

Hurricane Katrina made its landfall on August 29, 2005, in Southeast Louisiana, not Texas, as a Category 3 hurricane. It caused significant damage to oil and gas industry infrastructure. It was followed by Hurricane Rita, which made landfall on September 24th, also as a Category 3 hurricane.

The initial impact on crude production was about 1.2 million barrels per day (mmbd). GOM production at that time was about 400,000 b/d lower than the most recent estimates.

U.S. Crude Production
Continue reading "Analysis Of Hurricane Harvey Impacts On The U.S. Oil Industry"