The amount of Libyan oil that is not being exported due to the conflict has been all over the place. It started out at "onepointfivemillion" barrels of oil per day, but I have seen figures as low as 600,000 barrels oil lost per day. I assume some of the difference has to do with the source of the report, and any "hidden agenda" of the media source. Be that as it may, the Libyan loss could have been as little as 600,000 bopd when the conflict started. Since then, of course, it has increased (one would assume).
Today, we learn that a terrorist (?) blew up a major Iraqi pipeline which has resulted in the loss of 400,000 bopd being exported by Iraq. There's not a whole lot of difference between 600,000 bopd and 400,000 bopd.
It took a major national upheaval in Libya to result in a loss of a relative small amount of oil, and some terrorist was able to cause almost a much disruption with one event, and it got minimal press.
Bruce,
ReplyDeleteI listened to Rex Tillerson today on CNBC. He seemed to be intent to subddue speculation and reassure us that supply was adequate. He also said that it would take $4.00 gas prices to set the economy back. I think we are getting close that now where I am. I think people who make 27 mil a year lose touch. I could be wrong... maybe it's a rags to riches story. He was followed by Cramer who basically stated that he agreed with everything that was said but that the price of oil is being driven by total speculation. I liked Tillerman's comment when he was asked what kept him awake at nignt... In which he basically kindly said what is happening over to the people of the middle east concerns me over everything else. Saudi Arabia from what I have heard will be much more severly fierce on protesters that we have seen so far in the other middle eastern uprisings... and those have been horrible...Friday seems like it will be a real turning point. Right now there is a lot of uncerntainty and what happens in the middle east is really going to push the price of oil one way or and as result of friday. Seems stock prices in the Bakken will be affected considerably...either way as well.
Very nice post, thank you.
ReplyDeleteI missed CNBC all day today because I was teaching; when I got home interrupted by phone calls.
Tonight Kudlow said Saudi stock mkt rebounded nicely; earlier it was said Saudi was not going to meet for awhile -- both data points suggest Saudi is not worried about terrorists or supply. You are correct: Saudi has their kingdom under much better control. And US ready to support immediately; no way will they let those fields fall.
With regard to the Bakken and the Mideast events, I plan to do a stand-alone post on the weekend. I'm traveling on Friday and busy with grandchildren on weekend, so not sure how much blogging I will get done, but will try my best to keep up.
Overall, I am very, very optimistic, but then I'm always irrationally optimistic.
I still find it simply incredible any Bakken stocks fell in price when oil is still at $104. Bakken investors loved it when oil was $80. Now it's $104. I don't think anyone has any idea how to value Bakken acreage.
Lots of idle rambling. Thank you for your Tillerson udpate.
My gut feeling: oil is going to be very, very volatile; it could drop quickly back to $80 if the Libyan thing is quelled, but Saudis are getting a chance to see how Americans handle $100 oil. They may like what they see.
Thanks for your comments Bruce... I'm long on the Bakken regardless
ReplyDeleteYou know I am. Long.
ReplyDelete