- it will take longer than first forecast to "get back to normal"
- Saudi has resumed "normal" loading operations
- full loading coming from strategic storage facilities
- Saudi has told foreign customers to expect full supplies
- however, Saudi said to be reducing allocations to own refineries, local economy
- Saudi officials consider delaying Aramco IPO pending full evaluation
- no one has yet suggested that Saudi Arabia paid Iran to hit their storage facilities to raise the price of oil -- this would be the "Hillary/Comey/Clapper" scenario
- most interesting note: Saudi Arabia said to be concerned that other producers will over-react to the situation --- in other words, Saudi Arabia is worried about losing market share as customers find other (more reliable) sources
Interestingly enough, most (all?) are still below their 52-week highs. There are headlines suggesting that prices in the oil sector still do not reflect reality. Which, of course, does not make sense if one accepts market efficiency and the philosophy of free markets.
So, get it while you can.
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Opinion: it's hard to believe this article (an op-ed piece) made the MarketWatch page -- "The truth about the stock market that "Never Trumpers" cannot accept. Link here. My hunch is that Brett Arends will never work for CNN Business News.
Memo to Donald Trump’s critics: Just 3,000 more points to go!
That’s how much further the Dow Jones Industrial Average has to fall before you can start saying Trump’s been bad for the stock market.
Yes, the Dow has plunged more than 1,000 points in a couple of weeks, thanks to the president’s tariff spat with China. Yes, it went through a wild swing Wednesday, plummeting more than 500 points at the open before rallying.
But: Perspective, folks.
The Dow was just 18,000 when Trump was elected nearly three years ago. Right now, even following Monday’s big drop, it’s above 26,000.Futures: Dow down 94 points, hardly remarkable. It's almost as if nothing happened over the weekend. If the Dow finishes in the green today, even by a little bit, it will speak volumes about the health of the US economy.
If Saudi does not retaliate militarily this is why: if ten bottle rockets can knock out 50% of Saudi's crude oil exports, can one imagine how much would be knocked out in the first 24 hours of all-out war? Yeah, that much.
Non-oil proxy today: UNP. UNP was up at the close on Friday; today, futures, UNP is absolutely flat.
here's some GLOBAL supply numbers from the new OPEC report that i posted last night:
ReplyDeleteOPEC has estimated that during the 3rd quarter of this year, all oil consuming regions of the globe will be using 100.63 million barrels of oil per day, which was revised from their estimate of 100.69 million barrels of oil per day for the 3rd quarter a month ago....meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were still only producing 99.24 million barrels per day during August, which means that there was a shortfall of around 1,450,000 barrels per day in global oil production when compared to the demand estimated for the month... in addition, the downward revision of 300,000 barrels per day to July's global output that's implied in this report, partially offset by the 60,000 barrels per day downward revision to 3rd quarter demand that we've just noted, means that the 1,980,000 barrel per day shortfall that we had previously figured for July based on last month's figures would now be revised to a deficit of 2,220,000 barrels per day....
however, demand figures for both the first quarter and 2nd quarter were also revised lower with this report, as you can see encircled by the green ellipse on the table above...the 170,000 barrels per day downward revision to 2nd quarter demand would mean that we'd have to revise our global oil deficit for June from 790,000 barrels per day to 620,000, that we'd have to revise our May deficit from 1,160,000 barrels per day to 990,000 barrels per day, and revise our global oil deficit for April from 1,030,000 barrels per day to 860,000 barrels per day...hence, for the 2nd quarter as a whole, even after those downward revision to demand, the world's oil producers were producing 767,000 barrels per day less than what was needed...
that's all before the latest news....indications are that 2 mbpd of the 5.7 mbpd that got knocked out will come back pretty quickly...but what if 3 mbpd stays down three months? that would be on top of the 1.5 mbpd shortfall we're currently seeing....how fast can US & other production ramp up to replace even part of that?
I've moved this information to a stand-alone post:
Deletehttp://themilliondollarway.blogspot.com/2019/09/daily-global-deficit-two-million-bopd.html.
fine. but i'm trying to get a sense of how much we can ramp up production to replace part of that...i know oil DUCs are adequate, but how soon can they be completed?
Deleteie, in an emergency, how much more can the Bakken produce three month from now?
I alluded to this in a post yesterday. If Saudi's re-build is delayed longer than expected, adding to the current deficit, this will be a huge -- a huge -- test to see if US shale is the swing producer.
DeleteI think the timeline will be fascinating to watch. The next 30 days is critical. If Saudi Arabia is still drawing from their reserves to meet contracts at the end of October, folks will watch to see if US shale operators can respond. I have no doubt they (US shale) can respond. Regardless, it's going to be fascinating.