Sunday, June 8, 2014

Analysts Suggest Price Of Oil Could Surge Before End Of Year -- OPEC Struggling; Oil Inventories Globally At Lowest Level Since 2008 (Posted Prior To The Iraqi Insurgency)

Updates

June 9, 2014: price of WTI up over a $1/bbl; now solidly over $103/bbl again; up over 1%. Last evening (Sunday, June 8), Bloomberg was reporting the price of oil was increasing overseas:
“The economic data we’ve been getting have been a positive factor for the oil market,” Will Yun, a commodities analyst at Hyundai Futures Co. in Seoul, said by phone today. “There are positive developments on both the demand and supply sides, which gives support to crude prices at the moment.” 
China’s exports increased by more than the median 6.7 percent gain forecast in a Bloomberg News survey of economists, helping to cushion a slowdown as an unexpected drop in imports signaled risks to growth. 
Meanwhile John McCain, and others, talked an eastern European country to halt construction of a Gazprom pipeline which would have eased the pressure on Europe if the Ukraine is embargoed. You just gotta love how we Americans love to get into other people's business. LOL.

Original Post
A couple of dots to connect.

Long-time readers know my feelings about Saudi Arabia's ability to increase oil production, and sustain it, for a significant period of time.

Hold that thought.

Not long ago we were told that Libya and Iraq would soon be back on track to increase their oil imports.

Hold that thought.

Just the other day it was reported that oil stocks in the US declined more than expected.

So?

Bloomberg is reporting that Saudi Arabia is going to have put the "pedal to the metal" to meet global oil demands:
OPEC ministers say they will almost certainly leave their oil-production ceiling unchanged when the group meets this week. What really matters for global markets is whether Saudi Arabia will respond to global supply shortfalls by pumping a record amount of crude.
Just six months ago, energy analysts predicted output from the Organization of Petroleum Exporting Countries would climb too high and Saudi Arabia needed to cut to make room for other suppliers. They changed their minds after production from Libya, Iran and Iraq failed to rebound as anticipated, and industrialized nations’ stockpiles fell to the lowest for the time of year since 2008. Saudi Arabia may need to pump a record 11 million barrels a day by December (2014) to cover the other member nations, says Energy Aspects Ltd., a consulting firm. 
We'll see.

This should be interesting to watch play out.

I knew that US inventories were low, but I did not know global inventories were SOOOO low. At the linked article:
The International Energy Agency, the Paris-based adviser to 29 nations, recommended on May 15 a “significant rise in OPEC production” to meet demand of 30.7 million barrels a day in the second half of the year. Oil inventories in advanced nations were at 2.62 billion barrels in April, the lowest for that month since 2008, the year Brent reached a record $147.50 a barrel, IEA data show.
Boosting output that high would be “a Herculean task for the group to surmount given that production has been below 30 million barrels a day for the last five months,” London-based Energy Aspects said in a May 27 research note.
The situation has reversed since OPEC last met in December. At that time, the IEA indicated the group would need to reduce output by about 3 percent in the first half of 2014 to make way for North America’s booming shale oil supplies.
The Keystone XL North would have mitigated the coming trainwreck, but that's "water under the bridge," as they say. 

Note the significant increase in oil price expectations in the linked article. This is very, very bullish for "speculators."

Imagine what could happen if the global economy were to actually improve?

Wells Coming Off The Confidential List Monday -- The Williston Basin, North Dakota, USA

Monday, June 9, 2014
  • 24757, drl, Statoil, Melissa 31-30 5TFH, East Fork, no production data,
  • 25354, 1,179, Whiting, Mork Trsut 21-17-5H, Pleasant Hill, t12/13; cum 39K 4/14;
  • 25355, 2,061, Whiting, Mork Trust 21-17-4H, Pleasant Hill, t11/13; cum 36K 4/14:
  • 25356, 2,065, Whiting, Mork Trust 21-17-3H, Pleasant Hill, t11/13; cum 49K 4/14;
  • 25357, 2,069, Whiting, Mork Trust 21-17-2H, Pleasant Hill, t11/13; cum 49K 4/14:
  • 25389, 887, Whiting, Kessel 41-26PH, Zenith, t12/13; t12/13; 45K 4/14;
  • 25390, 1,117, Whiting, Kessel 21-26PH, Zenith, t12/13; cum 40K 4/14;
  • 25391, 1,263, Whiting, Kessel 11-26PH,  Zenith, t12/13; cum56K 4/14:
  • 25692, drl, Hess, BW-Erler 149-99-1522H-3, Cherry Creek, no production data,
  • 26728, 1,276, MRO, Walter 11-2TFH, Killdeer, t4/14; cum 8K 4/14;
  • 26745, drl, SM Energy, Tomlinson 3-1HN, West Ambrose, no IP yet; cum 6K 4/14;

Sunday, June 8, 2014
  • None.
Saturday, June 7, 2014
  • 23013, 876, CLR, Sacramento Federal 4-10H, Brooklyn, t4/14; cum 16K 4/14;
  • 26614, 36, Enduro Operating, MRPSU 29-13, Mouse River Park, a Madison well, t1/14; cum 2K 4/14;
  • 26681, 1,844, BR, CCU North Coast 11-25TFH, Corral Creek, t5/14; cum --
  • 26871, drl, XTO, Cindy Blikre 41X-2C, Lindahl, no production data,
*****************************
Poll: Which Location Will President and Michell Obama Visit In North Dakota?

This poll can now be taken down. The results (there should be no surprise):
  • Fort Berthold: 51%
  • Standing Rock: 31%
  • Spirit Lake: 10%
  • Lake Traverse: 5%
  • Turtle Mountain: 3%
Hope springs eternal, I guess.