• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 37 mins Pioneer's Sheffield in Doghouse. Oil upset his bragging about Shale hurt prices. Now on campaign to lower expectations, prop up price.
  • 7 hours Tesla Launches Faster Third Generation Supercharger
  • 41 mins EU has already lost the Trump vs. EU Trade War
  • 8 hours Passerby doused with flammable liquid and set on fire by peaceful protesters
  • 38 mins ''Err ... but Trump ...?'' #Humph
  • 10 hours Who writes this stuff? "Crude Prices Swing Between Gains, Losses"
  • 1 hour China's Renewables Boom Hits the Wall
  • 22 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 17 hours Climate Change Consensus Shifts in Wind, But Gas Is Still the Right Move
  • 23 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 21 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 22 hours Trump Interview On Farage's Radio Show #classy
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

Premium Content

Oil Rallies Higher, Undeterred By ‘Surprise Surge’ In U.S. Production

Oil is rallying for a second consecutive day, with continued positive momentum from yesterday's weekly inventory report, in combination with rising hopes of deeper and/or longer production cut commitments by OPEC. (OPEC cuts are starting to feel like QE at the turn of the decade: omnipresent). Hark, here are five things to consider in oil markets today.

1) Yesterday we discussed the impending restart to export flows of Nigeria's Forcados crude, as an export pipeline gets back up and running after militant attacks last year. Nigeria has suffered outages to a number of key grades such as Qua Iboe, Brass River and Bonny Light in the last year or so, but as our ClipperData illustrate below, we are seeing flows of most of these grades getting back up to speed.

The loss of the Forcados crude stream - which averaged ~200,000 bpd of exports in 2015, dropping to ~50,000 bpd last year - has had a material impact on total exports. Similarly, Qua Iboe loadings dropped by about 110,000 bpd on the prior year to average 241,000 bpd in 2016, and have still not returned to 2015 levels.

Exports of these four grades averaged nearly 330,000 bpd lower last year than in 2015. All else being equal, a return to their former glory will lift Nigerian exports to within swinging distance of 2 million barrels per day.

(Click to enlarge) 

2) Pemex announced late last week that Mexican crude exports hit a record low in March at just over 1 million barrels per day. We can see from our ClipperData that exports in April have ticked even lower. The drop in exports is led by falling production; oil production is said to have dropped to 2.02 million barrels per day in March. Output peaked in 2004 at 3.38mn bpd, and has been in structural decline ever since amid a lack of investment. Related: Gas Looting In Mexico Turns Deadly

We can see in our ClipperData that exports to the U.S. have stabilized in the last year, with loadings bound for the U.S. up 3.5 percent through the first third of this year compared to year-ago levels. With the U.S. accounting for ~600,000 bpd of Mexican crude exports, Southern Europe and Asia account for the vast majority of the remaining volume, averaging over 400,000 bpd so far this year:

(Click to enlarge) 

3) Today's piece out on RBN Energy takes a look at U.S. distillate exports, using our ClipperData to highlight how flows are continuing to rise into Central and South America. Last month saw exports rise to the third highest month on our records - surpassed only by June and November of last year. This rise is coming at the expense of flows to Europe, which have been anchored below year-ago levels for the first four months of this year.

(Click to enlarge)

4) OPEC's monthly oil market report has been released, and hark, here are some key takeaways: the cartel has kept demand growth unchanged for this year at 1.27 million bpd - with non-OECD countries accounting for 1.04 million bpd of that - but has lifted last year's demand growth by 65,000 bpd to +1.44 million bpd.

On the supply side, it has boosted its expectations for non-OPEC supply growth by 370,000 bpd from last month, up to 950,000 bpd, predominantly driven by U.S. shale production. It projects 820,000 bpd of supply growth from the U.S. this year.

(Click to enlarge) 

The charts below are from the actual OPEC report, showing OPEC's projection for the U.S., Canada and Brazil to lead supply growth higher this year, while Chinese output ebbs again:

By Matt Smith

More Top Reads From Oilprice.com:

Download The Free Oilprice App Today

Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play