News pushing oil prices higher - Nov 1

[dan_s]

My comments in blue.

On October 27, Bloomberg reported that China’s crude oil stockpiles declined to 919.3 million barrels as of October 24, which is 59% of capacity, according to data analytics firm Kayrros. This is down from 61% of capacity last month.

On October 27, Bloomberg reported that unrest in Sudan following a coup has put at risk 130,000 b/d of combined crude exports from the country and South Sudan, according to a note from industry consultant FGE. < This is a reminder that when OPEC+ is totally out of spare production capacity in 6 to 9 months, small supply outages like this will have BIG impacts on global oil prices.

On October 29, Reuters reported U.S. crude oil production fell by 185,000 b/d in August to 11.14 million b/d, down from a revised 11.33 million b/d in June, the U.S. Energy Information Administration said in a monthly report. The move came as offshore crude production fell by 312,000 b/d in the month, the report said. Offshore output was hit at the end of August as Hurricane Ida approached and eventually made landfall; at one point, most U.S. Gulf offshore was offline. The three biggest producing states, Texas, New Mexico, and North Dakota, all showed a modest increase in output. Meanwhile, monthly gross natural gas production in the U.S. Lower 48 states rose 1.3 Bcf/d in August to a 17-month high of 106.0 Bcf/d, the EIA said in its monthly 914 production report. < During the winter heating season (starting this month) consumption of U.S. natural gas increases to 120 to 160 Bcf/day with the difference take from the U.S. natural gas storage system. A cold start to winter this year (with storage below normal today) could send gas prices much higher.

That was the first time gas output rose for three months in a row since January. Gross gas output peaked at 107.4 Bcf/d in November 2019. In top gas producing states, output rose 0.2% in Texas to 29.4 Bcfd in August and 3.9% in Pennsylvania to a record 21.8 Bcf/d. Production peaked at 30.3 Bcf/d in Texas in January 2020.

On October 29, Reuters reported an OPEC+ committee largely stuck to forecasts of a strong demand rebound this year and next ahead of the OPEC+ regular meeting next week, at which the group is expected to rubber stamp a planned output increase of 400,000 b/d in December. The Joint Technical Committee (JTC), which met on Thursday, now expects oil demand to grow by 5.7 million b/d in 2021, 120,000 b/d below OPEC's forecast in its latest monthly report, two OPEC+ sources said. The JTC left its demand forecast for next year steady at 4.2 million b/d, one of the sources said.

On October 29, Bloomberg reported that oil and gas companies would be forced to pay for excess methane leaking from wells, storage sites, and pipelines under a draft of President Joe Biden’s climate and socialist spending plan. Under the measure released Wednesday, fees of as much as $1,500 per ton would be imposed on an array of oil and gas infrastructure from wells and pipelines to the terminals that process natural gas. < And the idiots on "Team Biden" wonder why the U.S. oil & gas industry is not responding to his begging for more supply. Russia and Saudi Arabia will keep laughing all the way to the bank.

On October 29, Bloomberg reported that Eurozone GDP rose by 2.2% in 3Q 2021 vs. 2Q 2021 (up 3.7% y/y), according to Eurostat. This was 0.1% above the consensus estimate. < "Post-Pandemic World" will rebound if governments can just stay out of the way.