Tuesday, April 28, 2020

One Last Hurrah -- OPEC Oil Supply Surges In April -- Ahead Of New Cuts -- Reuters -- April 28, 2020

Link here.

Independent analyst: Geneva-based Petro-Logistics --
  • OPEC "supply" surged by more than 2 million bopd in April
  • highest since December, 2018
  • increase driven by record supply from Saudi Arabia and the UAE
  • multi-year high from Kuwait
  • the new quotas take effect May 1, 2020

That's a 60-million-bbl surge for the month. Meanwhile, the US SPR received one million bbls of crude oil in the month of April -- reported by Bloomberg.

As I've said many times on the blog, there never was an "OPEC." It was all Saudi Arabia and now it's come down to this: Saudi Arabia vs Russia vs the US. 

To paraphrase Roy Scheider in Jaws: "we're gonna need a bigger hole."

Déjà Vu All Over Again

I remember all the discussion on the blog some years ago regarding shale vs offshore. Some memes from that era:
  • offshore produces oil more cheaply than shale;
  • global supply will fail to meet demand because oil companies investing so little in offshore drilling;
April 27, 2020: Diamond Offshore files for bankruptcy Year-end 2019 data:
  • $5.8 billion in assets
  • $2.6 billion in debt
  • $434.9 million in cash on hand
Diamond owns rigs that can drill in water more than two miles deep. But offshore oil is among the most expensive to produce, putting the company at a disadvantage when prices plunged to less than $30 a barrel.
While newer deepwater projects are less expensive, they still take longer to develop than shale wells and they still can’t compete on costs. What’s more, a global glut of offshore vessels has squeezed profit margins.

Saudi imports: there are reports that US will import 600,000 bopd from Saudi Arabia in April. This is 50% higher than the current 400,000-bopd-average over past few months but is in line with Saudi imports one year ago

BP earnings plummet by two-thirds -- reported by Financial Times. Maintains dividend.

Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Venezuela: importing gasoline.

US exported record amount of naphtha; the drop in US gasoline demand due to COVID-19 lockdown measures has reduced requirements for naphtha for domestic gasoline blending, prompting US producers to export excess cargoes not only from the US Gulf Coast but also the US West Coast. Link here to S&P Global Platts.

Texas governor will let "stay-at-home" orders to expire on May 1, 2020. First place I'm gonna visit: local Lego min-bricks and figures outlet.

Ferrule: word of the day. From I. Pencil

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