• 22 hours Iraq Begins To Rebuild Largest Refinery
  • 1 day Canadian Producers Struggle To Find Transport Oil Cargo
  • 1 day Venezuela’s PDVSA Makes $539M Interest Payments On Bonds
  • 1 day China's CNPC Considers Taking Over South Pars Gas Field
  • 1 day BP To Invest $200 Million In Solar
  • 1 day Tesla Opens New Showroom In NYC
  • 1 day Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 1 day Venezuela Sells Oil Refinery Stake To Cuba
  • 2 days Tesla Is “Headed For A Brick Wall”
  • 2 days Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 2 days IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 2 days Goldman Bullish On Oil Markets
  • 2 days OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 2 days Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 2 days Syria Aims To Begin Offshore Gas Exploration In 2019
  • 2 days Australian Watchdog Blocks BP Fuel Station Acquisition
  • 3 days Colombia Boosts Oil & Gas Investment
  • 3 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 3 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 3 days Aramco On The Hunt For IPO Global Coordinators
  • 3 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 3 days India Feels the Pinch As Oil Prices Rise
  • 3 days Aramco Announces $40 Billion Investment Program
  • 3 days Top Insurer Axa To Exit Oil Sands
  • 4 days API Reports Huge Crude Draw
  • 4 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 4 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 4 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 4 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 4 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 4 days Exxon To Start Reporting On Climate Change Effect
  • 5 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 5 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 5 days Forties Pipeline Could Remain Shuttered For Weeks
  • 5 days Desjardins Ends Energy Loan Moratorium
  • 5 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 5 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 5 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 8 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 8 days Mexico Blames Brazil For Failing Auction

Breaking News:

Iraq Begins To Rebuild Largest Refinery

Alt Text

Are U.S. Shale Stocks Finally Set For A Rebound?

After years of meager returns…

Alt Text

Cyberattacks: The Biggest Threat To OPEC

As OPEC countries adopt automation…

Alt Text

Blockchain And The $3.6 Trillion Infrastructure Crisis

There is an infrastructure crisis…

Matt Smith

Matt Smith

Taking a voyage across the world of energy with ClipperData’s Director of Commodity Research. Follow on Twitter @ClipperData, @mattvsmith01

More Info

Oil Crashes Towards $50 Handle On Bearish EIA Data

Shale gas rig

Oil is finding some support thus far today off the back of the IEA's monthly oil market report, which pointed to a tightening market amid OPEC production cuts. Hark, here are five things to consider in oil markets today.

1) In a similar fashion to yesterday's OPEC report, IEA has boosted Iraqi oil production to a record last month; OPEC's secondary sources had production pegged at 3.63 million barrels per day, while the IEA today has it at a very similar 4.64mn bpd. Production based on direct communication has it an even higher 4.83 million bpd.

As our ClipperData illustrate below, exports are kicking around 4mn bpd, when including both northern and southern Iraqi loadings.

(Click to enlarge)

2) The IEA's report was optimistic for demand, boosting demand growth for 2016 by 110,000 bpd to 1.5 million bpd, driven by colder weather in Europe in Q4, and Asian demand growth. This pace is set to slow to 1.3 million bpd this year.

While the agency is falling in line with recent evidence of rising US shale production, it again highlights something we pointed to yesterday - that Brazilian production should show a firm increase this year; combined with Canada, it is expected to grow by 415,000 bpd. Non-OPEC production is expected to grow by 380,000 bpd this year - higher than OPEC's estimate of +120,000 bpd.

In terms of OPEC last month, it sees production falling by 320,000 bpd, led by Saudi (intentional, well, seasonal) and Nigeria (maintenance, strikes, geopolitics). Interestingly, it also sees Iranian production slipping to 3.72mn bpd, after peaking in October; we see in our ClipperData that exports topped out at this point also - and have been considerably lower since, even as floating storage has dropped.

(Click to enlarge)

3) This is unashamedly nerdy, but it's super-interesting (and nutty) to see that Saudi Arabia and UAE account for 60 percent of crude imports into Japan. Although it has been surpassed by India last year, Japan is still the fourth largest importer in the world.

Saudi and UAE have strong ties to Japan; they both lease crude storage in Okinawa. Saudi has been storing crude in Okinawa since February 2011, and back in September, it expanded its agreement with the Japanese government by 2 million bbls to store up to 6.3 million bbls. The Japanese government provides the storage space for free, on the proviso that it gets a priority claim on the oil there in case of emergency. Related: $25 Trillion Investment Needed To Meet Future Oil Demand

It has just been announced overnight that the Abu Dhabi National Oil Company (ADNOC) has had its agreement to store the same volume, 6.3mn bbls, extended to the end of 2019 - after it was set to expire at the end of this year. UAE has been storing oil at Okinawa since 2009, even longer than Saudi, giving it easy access to Asian markets. Over 30 percent of UAE's crude exports go to Japan, while only 13 percent of Saudi's exports head there.

(Click to enlarge)

4) After slashing costs in the last two years amid the oil price slump, Cnooc is set to raise capex to 70 billion yuan, after it dropped to 50 billion yuan last year, the lowest since 2009 (hark, chart below). The company produced 470mn bbls last year, and has a production target of 450-460mn bbls for this year; last year was its first output decline since 1999.

As we discussed earlier in the week, Chinese domestic production is under threat of further shrinkage; 54 percent of Cnooc's capex this year will be invested in domestic production. Some 64 percent of its total production is produced domestically, with other projects as far afield as the Gulf of Mexico.

(Click to enlarge)

5) Despite its focus on renewables, natural gas is the largest source of power generation in Mexico, with more than 60 percent of capacity additions through 2020 to come from the fuel. Natural gas currently accounts for 54 percent of Mexico's power generation, up from 34 percent in 2005:

(Click to enlarge)

By Matt Smith

More Top Reads From Oilprice.com:




Back to homepage


Leave a comment
  • Bud on January 19 2017 said:
    Careful, the cftc is now watching

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News