Most Important Story Of The Week -- Geopolitical Energy -- God Smiles On The US Refiners -- February 20, 2019

The big stories.

Saudi Arabia on the ropes.

From Blomberg via Rigzone, new Brazil production adds to OPEC headache. Remember: just a few years ago folks were wringing their hands over inadequate off-shore exploration and production. Well, here goes. Data points:

• Brazil, offshore
• the Tartaruga Verde field (the "green turtle")
• the giant P-67 floating oil production vessel; lit its flare tower earlier this month
• should produce 150,000 bopd, and then plateau
• a second platform, P-76 also 150,000 bopd should come on line later this year 
• then, P-68 and P-77 in 2019, 
• and, then, between 2020 and 2023: ten more 
• let's see, that's fourteen (14 * 150,000 = 2.1 million bopd -- as much as the Bakken is predicted to produce at its peak)
• marked the start of a Brazilian supply boom that's poised to challenge OPEC's efforts to balance the global market

Bloomberg has not forgotten about the Bakken:

The Brazilian surge, combined with more oil from shale fields from Texas to North Dakota, is set to create a headache for the Organization of the Petroleum Exporting Countries. In the worst-case scenario, it may force Saudi Arabia and Russia to roll their production cuts over into the second half of the year, testing the strength of the Riyadh-Moscow oil relationship.

Much, much more at the link.

And then, look at this: God is smiling on the US refineries! LOL.

Apparently this new Brazilian oil, at 27 degrees API, is slightly heavier than UL (Russian - Urals Light) and AL (Saudi Arabian Light). 

• https://t.co/nnJ6yljeHC -- a PDF will likely load on your desktop.

This new source of heavy oil from Brazil will easily displace imports from Saudi Arabia and may, in fact, impact Canadian exports.

In fact, Bloomberg also noted that:

The Brazilian surge comes at the right time as the world’s oil market is hungry for the kind of oil that the pre-salt fields pump: medium-heavy crude, ideal for refining into diesel. The production cuts in OPEC and Canada, coupled with American sanctions on Iran and Venezuela, have significantly reduced the availability of medium-heavy crude, pushing its price higher relative to the global benchmark.