WTI prompt month (NOV 19) was up $0.55 on the day, to settle at $58.64/Bbl.
NG prompt month (OCT 19) was down $0.007 on the day, to settle at $2.527/MMBtu.
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My take on the claims by Saudi Arabia that they will fully restore oil "production" are being made so their primary customers don't turn to others for oil supply. They may indeed restore "production" from the ground, but I find it hard to believe the damage at the Abqaiq processing facility (largest in the world) can be restored that fast. - Dan
By Tsvetana Paraskova for Oilprice.com
Despite continued reports that Saudi Arabia would struggle to restore oil supply by the end of this month as it had promised and that repairs would likely take months rather than weeks, a source told Reuters on Monday that the Kingdom would fully restore by early next week the oil production lot in the September 14 attacks on Saudi oil infrastructure that knocked 5.7 million bpd—or 5 percent of global oil supply—offline.
According to the Reuters source, Saudi Aramco has restored 75 percent of the production lost in the attacks. Output at the Khurais oil field was more than 1.3 million bpd as of Monday, while production from Abqaiq stood at around 3 million bpd. < Abqaiq is an oil processing facility that cleans up the oil before it is loaded for export, it really does not have "production".
Immediately after the attacks, the oil market went into panic mode early last week, with prices jumping the most on record last Monday. Oil prices eased off later in the week, after Saudi Arabia started to insist through official statements and sources that it would fully restore oil supply by the end of September.
As of September 19, Aramco had reportedly restored around 40 percent of the affected production capacity and continued to ensure customers they would receive all the oil supply they had contracted—although some lighter grades would likely be replaced with heavier crude grades.
The market, however, continued to question the timeline given by the Saudis.
Repairs at Khurais and Abqaiq may take several months rather than the ten weeks tops that Aramco had initially estimated, the Wall Street Journal reported on Sunday, citing foreign contractors working with the Saudi state oil giant.
Saudi Aramco, for its part, said this past Saturday that it organized a media tour of local and international journalists at the facilities hit in the attacks and reiterated that it was “able to ensure that not a single shipment to its international customers has been missed or canceled as a result of the attacks, and the Company will continue to fulfil its mission of providing the energy the Kingdom and the world needs.”
Oil Price - Sept 23
Oil Price - Sept 23
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Price - Sept 23
Raymond James' take on Saudi Arabia from fresh report (9/23):
Energy Stat: Saudi Outage Is a Bigger Deal Than the Oil Market Is Currently Pricing Into Oil Prices
The drone attack against Abqaiq and Khurais on September 14 caused the world's largest oil supply disruption in nearly three decades - by any measure, a stunning event. Having published
our initial take last Monday, today we will provide more of our thoughts. Here are five key points:
(1) remember, EXclusive of the impact from this Saudi production outage, our global oil supply/ demand model already showed aggregate global oil inventories falling to critically low levels by
the end of 2020;
(2) INclusive of the impact from this outage, aggregate global oil inventories now fall to critical levels six months sooner than we thought, in early 2020;
(3) Saudi's own inventories, which are already in decline, will face heightened pressure as the country strives to normalize exports, particularly given that we do not take the official repair timetable at face value;
(4) the odds of military escalation between Saudi and Iran are more likely than the market is currently pricing into oil, and direct U.S. involvement is likely in some form; and
(5) all of this will play a role in the U.S. presidential campaign, vis-a-vis foreign policy, the Strategic Petroleum Reserve, and environmental issues.
Read RJ's full report here: https://www.investorvillage.com/uploads ... update.pdf
Energy Stat: Saudi Outage Is a Bigger Deal Than the Oil Market Is Currently Pricing Into Oil Prices
The drone attack against Abqaiq and Khurais on September 14 caused the world's largest oil supply disruption in nearly three decades - by any measure, a stunning event. Having published
our initial take last Monday, today we will provide more of our thoughts. Here are five key points:
(1) remember, EXclusive of the impact from this Saudi production outage, our global oil supply/ demand model already showed aggregate global oil inventories falling to critically low levels by
the end of 2020;
(2) INclusive of the impact from this outage, aggregate global oil inventories now fall to critical levels six months sooner than we thought, in early 2020;
(3) Saudi's own inventories, which are already in decline, will face heightened pressure as the country strives to normalize exports, particularly given that we do not take the official repair timetable at face value;
(4) the odds of military escalation between Saudi and Iran are more likely than the market is currently pricing into oil, and direct U.S. involvement is likely in some form; and
(5) all of this will play a role in the U.S. presidential campaign, vis-a-vis foreign policy, the Strategic Petroleum Reserve, and environmental issues.
Read RJ's full report here: https://www.investorvillage.com/uploads ... update.pdf
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group