The Million Dollar Way (The Bakken Oil Blog): Let's Re-Cap -- Technically, It's A Depression -- April 16, 2020

Thursday, April 16, 2020

Scrolling down twitter:

COP to cut production by 225,000 bopd
Saudi Arabia told OPEC it cuts its crude production by 51,000 bpd to 9.733 million bpd in March

remember, Saudi Arabia started this, quibbling over 400,000 bopd
Saudi Arabia completely mis-read this
note: Saudi flooded the world with oil in March but yet is says its production actually declined; if accurate, confirms my earlier posts that Saudi simply emptied its oil in onshore storage and moved it to offshore storage
they needed to empty onshore storage to make room for continued production; shutting down wells in their old, old fields could irreparably damage existing wells
Saudi Arabia now paying customers to take their oil off their hands; again confirming they are in a panic about saving their wells, their oil fields
no one else has yet explained why Saudi would flood the world with oil in March while decreasing production
on-shore oil storage, cost: $0/bbl
off-shore oil storage: upwards of $50,000/day for an ULCC

OPEC has secured historic global support for cuts to remove around 15 million bpd from the market over the next few months; is that enough?
EIA -- a nominee for the Geico Rock Award? -- forecasts US crude oil production to decline because of low prices
Baker Hughes will cut 234 jobs in Oklahoma City; cuts will be permanent;
EIA weekly crude oil and refined products balances plunge
OPEC: oil output rose by 821,000 bopd month-on-month in March to average 28.61 million bopd
OPEC sees non-OPEC supply contracting by 15 million bopd in 2020
OPEC sees demand for its crude dropping to lowest in 30 years
COP to cut production by ~100,000 bpd to a gross 35,000 bopd; cutting production across US and Canada until market conditions improve -- they could be waiting a long, long time;
total number now receiving unemployment benefits: 22 million
definition of a depression: 20 million unemployed
debate around the continued relevance of the Brent benchmark amid its growing inability to fully reflect regional price signals has been heightened by the sharp fall in oil prices -- Argus Media;

and, finally, I can't make this up:

The story not being reported: why did Saudi Arabia do this?

empty their onshore storage, costing $0/bbl
transferring that oil to offshore storage at upwards of $50,000/day for ULCC storage
actually decreased production during the month of March when they said they were going to flood the market with oil

the cuts that OPEC would agree to for the rest of 2020 would be based on March, 2020, production