Energy Prospectus

Forecaster Spring Rock (Genscape) expects oil-directed rig counts to continue to fall through the middle of the year at current strip prices. Because of this, they forecast US crude oil production to be 1.1 million bpd below the 2015 exit rate. This is some 600,000 bpd lower than the most recent forecast made by the EIA.

I have been in this business for close to 40 years. Each oil price cycle overshoots to both the upside and the downside. The big difference today is that OPEC has almost no spare capacity. If Saudi Arabia overplays their hand, this could turn into the Mother of All Oil Shortages.

Read: http://valuewalkposts.tumblr.com/post/1 ... ndrew-hall

The gasoline demand for 2016. This should drain the glut.
Those high prices are just around the corner.
Look at the breakout from the 10 year range.

http://www.investorvillage.com/groups.a ... d=15864606

Yes, demand for refined products is seasonal as you can see on this chart: https://www.iea.org/oilmarketreport/omrpublic/

Each year, demand for transportation fuels spikes 1.5 to 2.0 million barrels per day in the summer.

Refiners start ramping up gasoline production in April/May to meet summer demand. Global demand for oil should catch up to supply early in Q3.

Oil Supply Risks: This is a reminder that a lot of world's oil comes from countries that have major risks to their supply infrastructure.

Nigeria: Loss of 250,000 b/d to 300,000 b/d due to pipeline attack/explosion on 3/7/2016, update today indicates the pipeline will be down until May.

Iraq/Kurdistan: The Ceyhan pipeline, which also was shut in on 3/7/2016: update today indicates Iraq will not resume pumping crude through the pipeline unless it reaches a financial agreement with the Kurdish regional government. Impact: Loss of about 150,000 b/d.

Details:

Nigeria: The damage caused by an attack on an underwater pipeline is set to halt flows of Nigeria’s Forcados crude oil to one of the country’s biggest export terminals until May. Almost 250,000 barrels a day of oil were scheduled to be exported from the Forcados stream in both February and March. The Forcados terminal has the capacity to export about 400,000 b/d, according to people familiar with the matter. The incident has curbed production — which was previously at 2.3m b/d — by 300,000 b/d, Mr Kachikwu said. Nigeria had a target of 2.4m b/d for 2016.

Royal Dutch Shell declared force majeure on February 21, a week after the pipeline was hit by an explosion, causing a leak that forced it to halt loadings to the Forcados export terminal.

Repairs to the pipeline could take until May, Emmanuel Ibe Kachikwu, minister of state for petroleum and the head of Nigeria’s oil company, said in Abuja on Tuesday.

The bombing of the pipeline was the most sophisticated attack on Nigeria’s oil-producing Delta in years and raised fears that such sabotage could once again cripple output in Africa’s top oil producer.

Iraq/Kurdistan: Iraq will not resume pumping crude through a Kurdish pipeline to Turkey unless it reaches a financial agreement with the Kurdish regional government, the Iraqi oil minister said on Tuesday. Adel Abdul Mahdi confirmed on his Facebook page that the central Iraqi government decided to stop pumping crude from fields under the management of its state-run company in northern Iraq through the pipeline. He said state-run North Oil Company previously fed 150,000 barrels a day into the pipeline that carries crude from the Kirkuk fields and other reservoirs managed by the Kurdish authorities to the Turkish Mediterranean terminal of Ceyhan.

"We have two options" in order to resume pumping, the minister said, demanding either a return to a previous oil agreement between Baghdad and the Kurdish regional government, or making a new agreement.