About That OPEC Oil Cut (Wink, Wink) -- Liar, Liar, Pants On Fire -- October 11, 2017

Weekly petroleum report: will be delayed one day. Will be released by the EIA October 12, 2017, due to Columbus Day earlier this week.

Hope springs eternal: from John Kemp --

Most analysts have expressed concern about the re-emergence of oversupply, a renewed rise in crude stocks, and how OPEC and its allies will exit from their current production deal in 2018.

But it is at least possible the market is moving towards a period of undersupply, when demand will be growing strongly, supply will be lagging, and stocks will feel uncomfortably tight.

Headline story, front page, The WSJ: OPEC oil production rose in September despite deal to limit output -- but that's okay -- cartel raises forecast for global oil demand growth for 2017 and 2018.

OPEC crude oil production jumped last month by nearly 90,000 barrels a day, complicating the cartel’s efforts to limit output and curb the global supply glut.

Output by members of the Organization of the Petroleum Exporting Countries rose by 0.27%, to 32.75 million barrels a day in September, compared with the month prior. The increase was driven by higher production in Libya, Nigeria, Iraq and Gabon, according to OPEC’s closely watched monthly oil market report.

OPEC and other major crude producers like Russia agreed nearly a year ago to cap production at around 1.8 million barrels a day below peak October 2016 levels, with the aim of alleviating oversupply and boosting prices. But the deal has been undermined in part by a surge in production in Libya and Nigeria, the two member countries not included in the deal because their oil industries had been damaged by civil unrest.

Yesterday: Iraq and Iran boost oil exports in sales battle with Saudis. And, OPEC asks US drillers to cut back. LOL. 

Iraq and Iran boosted crude exports in September, taking advantage of a slower pace of shipments from rival Saudi Arabia to win buyers in key markets like China and the U.S.

Iraq shipped 3.98 million barrels of crude a day, the highest since December, while Iran’s exports rose to 2.28 million barrels a day, the most since February, according to ship-tracking data compiled by Bloomberg. Saudi Arabia’s exports were 6.68 million barrels a day, the second-lowest for this year, the data show.

Iran and Iraq’s moves to grab market share cast a light on internal tensions within OPEC as Saudi Arabia, the group’s de facto leader and world’s top oil exporter, works to re-balance the global market. State-run Saudi Arabian Oil Co., known as Aramco, will make the deepest cuts in supplies to customers in its history in November, the energy ministry said Monday. [Sure.]

Drill, drill, drill; now, ship, ship, ship: US ships record amount of crude.

As crude oil gushes out of the U.S. like never before, it looks increasingly like North Sea oil will suffer collateral damage.

America exported a record high 1.98 million barrels a day of crude in the week ended Sept. 29, equal to the crude that normally gets shipped every day in the North Sea. Much of the U.S. outflow is going to Asia, which has become increasingly important in recent years in determining North Sea oil prices, effectively sandwiching Brent crude between bearish forces.

The impact of rising American oil shipments on Brent -- for many in the industry the most important crude benchmark -- shows the increasingly disruptive force of U.S. crude in international markets. Washington in late 2015 lifted a 40-year ban on most oil exports, in the process reshaping the world’s energy map with U.S. crude being sent by trading houses such as Vitol Group and Trafigura Group to faraway locations including Switzerland, China and Israel. The U.S. export restrictions were imposed in the aftermath of the 1973-74 oil crisis.

Vegas shooting. Hmmm. There may be a problem with the timeline.

Tax on soft drinks: well, that didn't last long. Chicago/Cook Country roll back tax on sweetened drinks. 

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Now, The Bakken

Active rigs:

$51.01→	10/11/2017	10/11/2016	10/11/2015	10/11/2014	10/11/2013
Active Rigs	57	33	68	190	185

RBN Energy: most diversified E&Ps fare well in second quarter; COP walloped by write-down.

The 13 diversified exploration and production companies we’ve been tracking would have posted second-quarter 2017 pre-tax operating profits of more than $4.8 billion — $1.1 billion more than their profits in the first quarter — if ConocoPhillips, the largest of the 13, hadn’t taken a $6.3 billion write-down in the value of the company’s crude oil and natural gas assets and registered a nearly $2.8 billion second-quarter loss as a result.

With an outlier radically skewing the group’s numbers, it’s best to put our baker’s dozen diversified E&Ps into two baskets — one for the 12 that didn’t take any significant impairments and the other for the lone E&P that took a huge one — and analyze each basket separately. Which is what we do in today’s blog.

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The Energy And Market Page

All major indices on track for another record-setting day.

WTI: holding at $51.

GE: the sadness of General Electric in one graphic --