According to Reuters, due to concerns about the slow recovery of oil demand, the Organization of the Petroleum Exporting Countries (OPEC) and its allies (OPEC+) have put pressure on oil-producing countries whose output exceeds their target, requiring them to further reduce production in August-September.
Onсе Saudi Arabia аnnоunсеd thе OPEC+ agreement to reduce wоrld оіl production bу nеаrlу 10 реrсеnt, оіl prices іn futurе соntrасtѕ in Aѕіа rose аftеr a fеw hоurѕ. Obѕеrvеrѕ еxресt that thе еаgеrnеѕѕ of thе mаjоr рrоduсеrѕ to rеасh thе bіndіng agreement before ореnіng the mаrkеtѕ in the dealings оn the first dау оf the wееk wоuld support рrісеѕ above thе $30 реr barrel bаrrіеr.
Saturday’s attack on Saudi oil facilities has disrupted Saudi refinery production. Aramco is trying to make orders for its oil deliveries. Saudi Arabia is said to have been forced to buy low-sulfur diesel. The extent of the damage to the Saudi oil facilities is still unclear. Some experts believe it could take several months to rebuild and repair the damage caused by the attack on the refinery. The question in the global energy markets is currently about Saudi Arabia’s ability to carry out oil orders and refinery products.
The oilfield equipment rental market is expected to grow at a CAGR of 3.87%, from 2017 to 2022, to reach a market size of $20.55 billion by 2022. Increasing technological advancements in oilfield equipment rental, rising global investments in Exploration & Production (E&P), growing drilling activity, and increasing unconventional hydrocarbon production in North America would drive the oilfield rental market during the forecast period.
- The Trump administration reinstated sanctions on Iran’s energy, banking and shipping industries. Washington granted temporary waivers to eight countries, including China and India, the biggest purchasers of Iran’s oil.
- The exemptions have been granted for 180 days, and will be reviewed toward the end of the period. China Waiver: 360,000 b/d. Purchases before sanctions: 658,000 b/d in Jan.-Sept. 2018
- Saudi Arabia has enough spare capacity to cover for any shortfall related to Iran, although any further unexpected outages – from, say, Venezuela, Libya or Nigeria – would test the cartel’s abilities. Saudis indicated a price level of approx. $80 per barrel is comfortable, and would target this price level.
- Venezuela’s crude production was in “free-fall” and could soon fall below 1 million barrels per day.
- The EIA expects U.S. crude oil production will average 10.9 million barrels per day (b/d) in 2018, up from 9.4 million b/d in 2017.
- Previously: American Shale Oil: Real Long Term Growth or Does History Repeat Itself with Boom then Bust?
- Is The Shale Slowdown Overblown? As the Permian runs into trouble, shale companies are pivoting to the Eagle Ford, the Bakken, the Niobrara and even Wyoming’s Powder River Basin.
- The oil industry, and particularly the Permian, is in the midst of a boom. New hints that maturing wells are falling well short of projections are prompting fresh worries that the industry may not be able to meet robust demand moving forward.
- Shale has thus lost some momentum at a time when investors have again found an appetite for the offshore domain, stimulated by a steep reduction in offshore costs and breakeven levels, which in turn have been driven by favorable unit prices.
- Technology and Efficiency helped raise U.S. production since 2016 and that has been achieved with an active rig count that is about 40% lower than it was just a half-decade ago.
- Production is still rising, but the crowded field is increasingly pushing shale E&Ps onto the periphery. The result is that the average well in the Bakken is producing less oil at its peak performance, as fringe areas are dragging down the average.