OPEC's Ability To Ease An Oil Supply Shock Is Now Fading -- Saudi Oil Spokesman -- May 25, 2016

Active rigs:

	5/25/2016	05/25/2015	05/25/2014	05/25/2013	05/25/2012
Active Rigs	28	83	191	186	215

RBN Energy: market impact of 2016 northeast natural gas demand.

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Is The Conversation Changing With Saudi Aramco IPO On The Horizon?

OPEC’s Ability to Ease An Oil Supply Shock is Now Fading. Spare production capacity set to hit 8-year low, creating an unexpected risk as supply outages eat into the glut -- WSJ. 

This year, OPEC’s spare pumping capacity—the amount it can bring online within 30 days and sustain for at least 90—will be at its lowest level since 2008, the U.S. Energy Information Administration estimates. It said OPEC spare capacity will decline more than 22% in the current quarter compared with the previous quarter.

Since last year, OPEC members haven’t been able to agree on supply cuts to stem a glut that drove prices down by more than 50% since 2014. Instead they kept pumping full blast. The result: With recent supply outages sending the oil price back up, the cartel has little flexibility to boost production.

OPEC is irrelevant. What are the Saudi numbers?

Saudi officials have long said they can boost production by about 2 million barrels a day over today’s record daily production of 10.2 million barrels. But that 2 million barrels might not be possible in short order, a Saudi oil industry official said.

“If there was a big crisis tomorrow, then the maximum Saudi Arabia can do would be around 500,000, maybe 700,000 maximum,” the official said.

Now that Saudi Aramco is getting ready to complete an IPO, the discussion seems to be changing.  

Other than all-out war in the Mideast, I do not see any chance of "an unexpected risk" of shortage of oil, and even when there have been some huge wars in the Mideast, I do not recall any shortage associated with these conflicts.

Meanwhile, over at oilprice.com, "OPEC head calls for $65 oil." Sixty-five-dollar oil will let the Bakken thrive; won't do much for Venezuela or Saudi Arabia.

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US Trap Laid For Taliban Chief Highly Successful

From The WSJ. Front page. Huge story. Many story lines.

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Chevron To Make Oil Investment Overseas

CVX to make huge investment in Kazakh oil field. Also in The WSJ.

ASTANA, Kazakhstan—A Chevron Corp.-led consortium is set to invest up to $37 billion as it increases output at a giant oil field in Kazakhstan.

The investment represents a rare big commitment by a large oil company to spend on new production during a nearly two-year long slump in crude prices. Companies have been forced to delay or cancel about $270 billion in projects through March since oil prices began their long slide including expensive Arctic developments.

The Kazakh project, called Tengiz, is one of the world’s biggest oil fields and a key source for Chevron’s growth in crude output in the next few years.

Note the byline of that last story: Astana, Kazakhstan. From the blog last year:

By the way, speaking of Kazakhstan, this is from an October, 2014, press release:

The North Dakota Trade Office (NDTO), along with North Dakota agriculture machinery and technology companies, are returning to the KazAgro Farm Show October 27-29, 2014, in Astana, Kazakhstan.  This year, the Ministry of Agriculture of the Republic of Kazakhstan – the main sponsor of the show – has invited NDTO to co-sponsor the program, because of North Dakota’s long-standing relationship with leaders in the Kazakh agriculture sector.

Wow, I love to blog.