Robert Boslego Archives - Page 10 of 34

$50 Crude Oil Not Likely To Hold

Posted on February 26, 2020February 25, 2020 by Robert Boslego

Citi is the latest to revise its estimates of the demand destruction from COVID-19. It said that it now believes inventories of crude oil could grow to 2 million barrels per day in February alone, which would put “even more sustained pressure on prices.” A week ago, the firm’s thought the potential build would be over one million barrels per day for the quarter.

Numerous sources have estimated China’s demand for crude had dropped between two and three million barrels per day since petroleum product consumption had dropped, and the profitability of running refineries had plummeted. But Goldman Sachs (GS) subsequently revised its estimate last week, that they now expect “a cumulative global stock build of 180 million barrels in 1H20, four times its pre-virus forecast.”

The Goldman forecast is based in part on an estimated hit in China’s crude oil demand of 4 million barrels per day. Goldman assumes that OPEC+ will deepen its cuts in 2Q by about 500,000 b/d.

OPEC’s Joint Technical Committee (“JTC”) met from February 4 to 6th and recommended “a further adjustment in production until the end of the second quarter of 2020” and “extending the current production adjustments until the end of 2020.” The cut would be an additional 600,000 b/d on top of the cuts announced in December.

But Russian Energy Minister Alexander Novak told reporters: Continue reading "$50 Crude Oil Not Likely To Hold" →

Strong US Crude Production Growth In November

Posted on February 4, 2020February 3, 2020 by Robert Boslego

The Energy Information Administration reported that November crude oil production averaged 12.879 million barrels per day (mmbd), up 203,000 b/d from October. In addition, the October estimate was revised 21,000 b/d higher, and so the total gain was 224,000 b/d from the prior estimate.

The Gulf of Mexico rose by 91,000 b/d to 1.995 million barrels per day. Texas production reached a new high of 5.329 mmbd, up 65,000 b/d from October. And New Mexico’s production gained 59,000 b/d to 1.063 million barrels per day.

Plains All American Pipeline LP’s (PAA) Cactus ll pipeline was expected to ship at full capacity, 670,000 b/d, beginning in September. EPIC Midstream’s crude oil pipeline began shipping 400,000 b/d. It is designed to ship 440,000 b/d from the Permian and another 150,000 b/d from the Eagle Ford.

Phillips 66 Partner’s Gray Oak pipeline is expected to ship an additional 900,000 b/d. It began shipments and is expected to be in full service by the end of the first quarter of 2020.

The gains from last December have amounted 953,000 b/d. And this number only includes crude oil. Other supplies (liquids) that are part of the petroleum supply add to that. For November, that additional gain is about 500,000 b/d. Continue reading "Strong US Crude Production Growth In November" →

Crude Oil To Chemicals Transition And Aramco's Plans

Posted on January 23, 2020 by Robert Boslego

Crude oil and Petrochemicals are the building blocks that are essential to making the goods that make modern life possible — from paints to plastics, space suits to solar panels, medicines to mobile phones. All of these things start with just six basic petrochemicals — ethylene, propylene, butylenes, benzene, toluene, xylenes — that are combined with other chemicals and transformed into other materials that make products better.

Petrochemicals do things like:

Make your phone water-resistant
Keep food fresher longer
Make your carpets stain resistant
Help tires repair themselves
Keep first-responders safe with fire-retardant clothing
Extend lives with cutting-edge medical technologies

Source: American Fuel & Petrochemical Manufacturers (AFPM)

According to a recent study, "Wells, Wires and Wheels… EROCI and the Tough Road Ahead for Oil," published by BNP Paribas Asset Management, the author, Mark Lewis, writes: Continue reading "Crude Oil To Chemicals Transition And Aramco's Plans" →

World Oil Supply And Price Outlook, January 2020

Posted on January 16, 2020January 15, 2020 by Robert Boslego

The Energy Information Administration released its Short-Term Energy Outlook for January, and it shows that OECD oil inventories likely bottomed last June 2018 at 2.800 billion barrels. It estimated stocks dipped 1 million barrels in December at 2.914 billion, 54 million barrels higher than a year ago.

For 2020, OECD inventories are projected to build by 47 million barrels to 2.962 billion. This is EIA’s first projection for 2021, and it forecasts that stocks will draw by 17 million barrels to end the year at 2.945 billion.

The EIA estimated that OPEC production dipped by 250,000 b/d in December to 29.24 million. For 2020, it estimates that OPEC production will average about 29.19 million, about 600,000 b/d lower than in 2019. For 2021, it estimates OPEC production will remain about the same. Continue reading "World Oil Supply And Price Outlook, January 2020" →

Strong U.S. Crude Production Growth In October

Posted on January 6, 2020January 3, 2020 by Robert Boslego

The Energy Information Administration reported that October crude oil production averaged 12.655 million barrels per day (mmbd), up 171,000 b/d from September. In addition, the September estimate was revised 21,000 b/d higher, and so the total gain was 192,000 b/d from the prior estimate.

Texas production reached a new high of 5.273 mmbd, up 53,000 b/d from September. Other gains were 70,000 b/d in North Dakota, 39,000 b/d in Colorado, and 26,000 b/d in Alaska.
The gain in North Dakota established a new high for the state. The Gulf of Mexico remained about 100,000 b/d below the August high.