Oil Prices - April 19

[dan_s]

The falling U.S. dollar is giving the oil price a boost. See: http://www.marketwatch.com/investing/index/dxy/charts

Kuwait oil production temporarily lower by 1.3 million b/d, likely restored within a week to ten days.

Oil rose around two percent on Tuesday as a strike by oil workers in Kuwait nearly halved crude production from the OPEC member, overshadowing bearish sentiment following Sunday's failure by producers to agree to freeze output levels.

Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd), according to an oil spokesman cited by news agency KUNA. That is little more than half of Kuwait's average output of 2.8 million bpd in March.

However, analysts said Kuwait's disruption would likely be brief and investors would soon refocus on the market's oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.

"In the coming days oil production is likely to partially recover from its initial drop as non-striking staff is redistributed and inventories drawn upon, avoiding a force majeure on loadings," policy risk consultancy Eurasia Group said.
---------------------
Production from Nigeria and Iraq is down a combined 400,000 BOPD because of sabotage to a pipeline in Nigeria and a disagreement with the Kurds in Iraq. These two are expected to last for awhile.

Another force majeure on Nigerian crude exports. This time it is ENI’s Brass River terminal that suffered a fire tied to growing unrest in the Niger Delta. Exports at Brass River have been curtailed by ~ 150,000 b/d. This is on top of the ongoing force majeure at the Forcados terminal impacting 250,000 b/d of exports through May.