|Day's Range||61.61 - 62.44|
Oil shed some of its massive gains on Tuesday as the United States flagged the possible release of crude reserves, but the threat of military action over the attacks on Saudi oil facilities kept prices elevated and stocks under pressure.
Two Saudi Aramco crude oil facilities were attacked by Iran-backed Houthi rebels using drones. At 10:23 AM, Brent crude oil was trading up 11.2% at $67.
Oil prices spiked on Monday, following Saturday’s attacks on Saudi oil infrastructure, but analysts don’t have a clear picture yet about how long and how severe the supply outage will be
Tullow Oil's (TUWOY) Joe-1 oil discovery follows its massive and significant oil discovery in August at its Jethro-1 exploration well in Guyana.
Energy Aspects’ chief oil analyst Amrita Sen doesn’t expected Saudi oil production to fully recover for weeks or even months following the attacks on Saturday
On Sunday, President Trump took a significant step to minimize the upside in oil. He tweeted that the SPR will be used to limit oil prices' upside.
Oil prices could test the US$80 a barrel Brent Crude price, following the attacks on the Abqaiq facility and the Khurais oil field in Saudi Arabia this weekend
(Bloomberg) -- American shale producers, one of the worst-performing segments on the stock market this year, jumped Monday morning after an attack on a Saudi Arabia oil production facility over the weekend sent crude prices soaring.Whiting Petroleum Corp. surged as much as 41%, the most on record, while Apache Corp. and Marathon Oil Corp. were among other names to post strong gains in New York. The bonds of companies including Whiting and California Resources Corp. also climbed after the global crude benchmark clocked the biggest advance in dollar terms since futures started trading in 1988.State energy producer Saudi Aramco lost about 5.7 million barrels per day of output on Saturday after 10 unmanned aerial vehicles struck the world’s biggest crude-processing facility in Abqaiq and the kingdom’s second-biggest oil field in Khurais.While the attack was seen as good news for U.S. producers, refiners dropped since the bulk of American facilities rely on heavy crude supplied by countries including Saudi Arabia. PBF Energy Inc. fell as much as 10%, while Valero Energy Corp. dropped 7.3%.Shale ReliefThe spike in oil prices offers relief at a critical time for U.S. shale producers, which have seen investors flee after the sector largely failed to generate shareholder returns while rapidly growing output.At the end of last week, independent oil drillers had fallen 25% in the preceding 12 months. Some smaller explorers have filed for bankruptcy or been forced into restructuring their debt. A series of issues -- reduced flow from wells drilled too close together, low oil and gas prices, and pipeline limits -- have forced producers to slow their growth plans.The companies that gain the most from the uptick in prices will likely be U.S. producers with sizable short interest, including Apache, Continental Resources Inc., Devon Energy Corp. and Noble Energy Inc., analysts at Houston-based Tudor, Pickering, Holt & Co said in a note Sunday.“Upstream should see some of the biggest gains as the increase in crude price will immediately flow through to improved cash flow,” Tudor Pickering said. “Given duration of outage, we suspect equity performance may be short-lived as investors continue to focus on imbalances in 2020 crude fundamentals.”Shale is lauded for its ability to quickly ramp up and down in response to global supply and demand. Still, crude produced in the U.S. is a different grade than that of Saudi Arabia, meaning refineries that rely on heavy crude won’t be able to turn to American supplies while Saudi Arabia output remain offline.It’s not yet clear how long the outage will last. Saudi Aramco officials are growing less optimistic that there will be a rapid recovery in oil production, a person with knowledge of the matter said. Saudi Arabia -- or its customers -- may use stockpiles to keep oil supplies flowing in the short term. U.S. President Donald Trump said Sunday he authorized releasing an amount of crude from the U.S. Strategic Petroleum Reserve “sufficient to keep the markets well-supplied.”(Updates with bonds in second paragraph)\--With assistance from David Wethe.To contact the reporters on this story: Rachel Adams-Heard in Houston at email@example.com;Tina Davis in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Simon Casey at email@example.com, Christine BuurmaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The drone attack on Saudi Arabia could have a far-reaching impact on oil prices as it eliminated roughly 5% of daily oil supply globally and it is not possible to mitigate these losses immediately.
Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking...
Saudi Arabia has long been the bed rock of global oil production, but the weekend’s events — and how markets have reacted — shows just how unstable that foundation can be.
Brent crude surged the most on record after a drone strike on a Saudi Arabian oil facility removed about 5pc of global supplies.
(Bloomberg) -- The record surge in Brent crude futures on Monday only tells part of the story of how the oil market is reacting to a strike on a Saudi Arabian oil facility that’s removed about 5% of global supplies. Here are five charts that shed more light on the granular impact.Historical PerspectiveBrent futures soared as much as $11.73 a barrel in intraday trading, the biggest increase since the contract launched in 1988. The global benchmark surged as much as 19.48% in percentage terms, the biggest jump since the first Gulf War in 1991.Scale of DisruptionThe estimated 5.7 million barrels a day of lost Saudi production is the single biggest sudden disruption on record. It surpasses the loss of Kuwaiti and Iraqi supply during the Gulf War in August 1990, and the hit to Iranian output in 1979 from the Islamic Revolution, according to the International Energy Agency.Timing is EverythingBecause the loss of oil is sudden, the impact is being felt more heavily in contracts for near-term delivery than further down the curve. The price gap between Brent for delivery this November and December 2020 doubled from $3.57 a barrel at the close of trading Friday to more than $7 on Monday.Protection MoneyThe options market shows traders are still nervous that prices will risen even further, and are now paying up to protect against it. Calls on West Texas Intermediate crude futures are pricier than puts for the first time since 2018.Location, Location, LocationGlobal oil prices are feeling the impact of the attack more intensely than those in the U.S., where the benchmark is slightly buffered by being delivered to a land-locked oil hub in Oklahoma. Brent’s premium to West Texas Intermediate widened as much as 37% to $7.40 a barrel, the biggest gap since July.\--With assistance from Javier Blas and David Marino.To contact the reporters on this story: Dan Murtaugh in Singapore at firstname.lastname@example.org;Alfred Cang in Singapore at email@example.comTo contact the editors responsible for this story: Ramsey Al-Rikabi at firstname.lastname@example.org, Andrew JanesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- The latest and most destructive attacks on Saudi oil facilities provide stark evidence of the vulnerability of global crude supply in an age of disruptive technologies that can bring a century-old industry to its knees -- at least temporarily.From remote-controlled drones to anti-ship mines and computer worms, hostile parties have employed an unpredictable array of asymmetric weaponry to confound one of the best-equipped militaries in the Middle East. Saudi Arabia blames many of the attacks against its oil assets on Houthi rebels in impoverished Yemen, where Saudi forces have been fighting since 2015 in a civil war that’s spilling across their shared border.The use of drones shows that “an air force or even particularly advanced rockets are not necessary to cause widespread economic damage to the kingdom’s center of gravity,” said Milena Rodban, an independent risk consultant based in Washington, D.C. The Saudis accuse Iran of backing the Houthis and supplying them with weapons.The attacks mark at least the sixth time in four months that Saudi energy facilities or tankers carrying the kingdom’s oil have been targeted. Mine attacks against ships near the Strait of Hormuz and drone strikes on Saudi pipelines in May and June served as warnings of the vulnerability of supplies, even if they didn’t cause significant cuts in shipments. The weekend attack, by contrast, forced an immediate halt in 5.7 million barrels of daily production.Cyber attacks, another element of asymmetric warfare, pose a similar risk. Saudi Arabia blamed unidentified people based outside the country for sending a virus that compromised state-run oil producer Saudi Aramco’s computer network in August 2012. Although the virus had no effect on output of crude and refined products, the incident highlighted Aramco’s vulnerability to cyber strikes.The Houthis have previously targeted Saudi pipelines and refineries, in forays over the past year. In other strikes against Aramco facilities, guards repulsed a 2006 al-Qaeda attack on Abqaiq, and bombings at residential towers near Aramco’s headquarters in Dhahran on the country’s eastern coast caused deaths and damage.Yemen’s Houthis claimed responsibility for Saturday’s attack. The rebels said they launched drones, and the Saudi Press Association reported that drones were involved. Saudi Aramco said “projectiles” hit its facilities.Although U.S. Secretary of State Mike Pompeo directly blamed Iran for the attacks, Iran’s Foreign Ministry spokesman Abbas Mousavi denied the accusation.“Saudi Arabia’s oil infrastructure is an attractive target to more than just the Houthis,” Rodban said. “Anyone hoping to sway oil markets, spook investors, and highlight glaring weaknesses in defenses can take advantage of cheap and easy-to-deploy drones.”(Adds details of asymmetric threats in second paragraph.)\--With assistance from Manus Cranny and Alaa Shahine.To contact the reporters on this story: Anthony DiPaola in Dubai at email@example.com;Verity Ratcliffe in Dubai at firstname.lastname@example.orgTo contact the editors responsible for this story: Nayla Razzouk at email@example.com, Bruce Stanley, Andrew BlackmanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- The chances of President Donald Trump easing sanctions on Iran’s oil exports have dropped to zero after an attack on Saudi Arabia’s oil industry that his Secretary of State Mike Pompeo has pinned on Tehran. The bigger challenge now will be reining in the U.S. hawks calling for retaliatory strikes on Iran’s energy industry facilities.Before this weekend the big political news dominating the oil market was the sudden departure of John Bolton as Trump’s hardline national security adviser. His leaving raised hopes (or fears, depending on your point of view) that waivers from sanctions might be reinstated for some buyers of Iranian crude; there was talk even of Trump meeting with Iran’s President Hassan Rouhani later this month.I’m deeply skeptical about whether such a diplomatic breakthrough would have taken place without Trump reopening Barack Obama’s nuclear deal with Iran, which the current president scrapped last year. I can’t believe Trump would have been willing to do that. The drone strike on Saudi Arabia’s Abqaiq oil processing facility in the early hours of Saturday morning makes such speculation irrelevant anyway.Pompeo appears to have taken on Bolton’s mantle of White House ultra-hawk. He blamed Iran for the attack in a Saturday tweet, even though responsibility has been claimed by the Houthi rebels being bombed savagely by a Saudi-led coalition in neighboring Yemen. They have plenty of incentive to retaliate.The secretary of state went further than linking Tehran to the attack through its training and support of the Houthis, who are part of a network of militant groups in the Middle East allied with Iran. “There is no evidence the attacks came from Yemen,” Pompeo said in his tweet. He’s yet to share any evidence that it came from Iran either.It would be better if he did. Memories of the “evidence” of Saddam Hussein’s non-existent weapons of mass destruction that precipitated the 2003 invasion of Iraq still linger. It’s a big step to say the attacks came from Iran. An earlier strike against Saudi Arabia’s East-West pipeline was deemed eventually to have been launched by Houthis operating from the sparsely-populated territory of south-western Iraq, although Iraq has denied that its territory was used for the new attack.Saudi Arabia started its devastating bombing campaign in Yemen in 2015 – with some U.S. backing and weaponry – after the Houthis took control of the capital and other parts of the country. Despite thousands of civilian deaths, terrible human rights abuses on both sides and a humanitarian catastrophe, the war has settled into an ugly stalemate. Saturday’s attack, along with previous drone strikes, shows the Houthis’ effectiveness in inflicting damage well beyond Yemen (if indeed it was them).Not surprisingly, Iran’s foreign ministry has denied responsibility. It now needs to go further and try to rein in its clients in Yemen. For its part, the U.S. should do the same in Saudi Arabia. Failure to do so will only lead to more attacks on the region’s oil infrastructure and more costly disruptions to supply.The Saudis will need weeks to restore full production capacity, according to my Bloomberg News colleagues Anthony DiPaola and Javier Blas. Other members of the OPEC+ group, who have been restricting output to boost oil prices since the start of 2017, will open their taps. But more than 85% of the OPEC production cut since January has come from Saudi Arabia itself. The available spare capacity is a lot less than it might appear at first sight.Riyadh was no doubt fearful that any rapprochement between Trump and Rouhani would have led to millions of barrels of Iranian oil gushing back onto the market, thereby scuppering the Saudi effort to support the crude price. The Abqaiq attack, and Pompeo’s response, shows there is no chance of that now. But the vulnerability of Aramco’s own installation to such strikes has created an infinitely worse problem.To contact the author of this story: Julian Lee at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Julian Lee is an oil strategist for Bloomberg. Previously he worked as a senior analyst at the Centre for Global Energy Studies.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Keep in mind that Saudi Arabia has yet to comment on the extent of damage on its oil production although Saudi Aramco President and CEO Amin Nasser said, “Work is underway to restore production and a progress update will be provided in around 48 hours.”
Saudi Arabia has yet to comment on the extent of damage on its oil production but industry sources have said some 5-6 million barrels per day (bpd) or 5-6% of global supply have been affected.
(Bloomberg) -- Middle East geopolitics have come back with a vengeance to hit the oil market. What everybody feared has happened. An attack has penetrated the defenses of Saudi Arabia’s massive Abqaiq oil processing facility, the heart of the kingdom’s oil production and export infrastructure, causing an unknown amount of damage. Crude prices will react and emergency stockpiles will be tapped.Fires at the plant were brought under control within hours, but the flow of crude from Saudi Arabia, the world’s biggest exporter, will almost certainly be affected, although we don’t yet know by how much or for how long. Traders who have shrugged off tensions in the Middle East for months will respond to this attack when markets open on Monday.The height of the price spike will depend on how much we know about the extent of the damage and how long it will take to repair. An absence of information will lead traders to assume the worst.The Abqaiq crude processing plant is the single most important facility in the Saudi oil sector. In 2018 it processed about half of the kingdom’s crude oil production, according to a prospectus published in May for the state oil company’s first international bond. That’s roughly 5 million barrels a day, or one in every 20 barrels of oil used worldwide.Abqaiq is more important to the Saudi oil sector than the kingdom’s Persian Gulf export terminals at Ras Tanura and Ju’aymah, or the Strait of Hormuz that links the Gulf to the Indian Ocean and the high seas. Crude can be diverted away from the Persian Gulf and Hormuz by pumping it across the country to the Red Sea through the East-West oil pipeline. But it cannot bypass Abqaiq. The East-West pipeline starts at Abqaiq and output from the giant Ghawar, Shaybah and Khurais fields is all processed there, so an attack on the facility will impact crude flows to export terminals on both coasts.The latest attack comes just months after drones, allegedly launched from Iraq by Yemen’s Houthi rebels, targeted pumping stations on the oil pipeline. The damage caused by that earlier attack was minimal, but highlighted the vulnerability of Saudi Arabia’s oil infrastructure, even when located hundreds of miles from the country’s borders.So what happens now?Saudi Arabia will probably seek to maintain export levels as much as possible by supplying customers from stockpiles. It holds crude in storage tanks in the kingdom, as well as at sites in Egypt, Japan and the Netherlands. But it has been running its crude hoard down since the beginning of 2016 and it is now back at levels not seen since 2008, according to data from the Joint Organisations Data Initiative. That means the kingdom has much less to draw on than it did three years ago.The attack will also test stockpiles in oil-consuming countries. Members of the International Energy Agency are required to hold 90 days’ worth of oil imports in emergency stocks and those will be pressed into service if the outage at Abqaiq is prolonged. Non-member countries like China and India have also been building up their own emergency reserves. Those, too, will be pressed into service.Neighboring countries who, just days ago, were being exhorted to stick to output quotas agreed in December will now pump as much as they can to make up for any losses from Saudi Arabia. The United Arab Emirates, Kuwait and Iraq will all boost output as much as they are able. But the one country with lots of spare capacity, Iran, won’t see any easing of the restrictions placed on its oil sales by the U.S. Quite the opposite. Its support for the Houthi rebels in Yemen, who have claimed responsibility for the attack on Abqaiq, will ensure that any easing of the pressure being exerted on it remains a distant prospect.To contact the reporter on this story: Julian Lee in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Alaric Nightingale at email@example.com, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The geopolitically strategic gas field Mansuriya is at play as the Iraqi government rescinded the license from Turkish TPAO, and both the U.S. and Russia and jostling for a stake
Equinor ASA's (EQNR) Mariner Blend crude production is likely to generate 70,000 barrels of crude per day in the short term while the production on average is envisioned to be roughly 55,000 bpd.
On September 12, natural gas prices rose 0.9% to $2.574 per MMBtu, and the EIA reported its natural gas inventories for the week that ended on September 6.