• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 19 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 11 hours How Far Have We Really Gotten With Alternative Energy
  • 10 days What fool thought this was a good idea...
  • 6 hours Bad news for e-cars keeps coming
  • 8 days A question...
  • 13 days Why does this keep coming up? (The Renewable Energy Land Rush Could Threaten Food Security)
  • 13 days They pay YOU to TAKE Natural Gas
Rystad Energy

Rystad Energy

Rystad Energy is an independent energy consulting services and business intelligence provider offering global databases, strategic advisory and research products for energy companies and suppliers,…

More Info

Premium Content

The Oil Glut Is About To Get Even Worse

Oil Glut

With only a week to go before OPEC+ countries start flooding the world’s total oil production with an estimated extra 2.5 million barrels per day (bpd) amid the Covid-19 crisis, building one of the biggest oil supply gluts the world has ever seen, UK operator INEOS has decided to postpone its scheduled maintenance for the North Sea Forties pipeline system (FPS) in a move that Rystad Energy calculates will add several hundred thousands of extra barrels to the market every day.

Based on this development, Rystad Energy has raised its North Sea oil production forecast by 330,000 bpd to 2.96 million bpd for June 2020 and by 190,000 bpd to 3.04 million bpd for July 2020.

“This just adds another ripple to the growing oversupply pool of global liquids – an overhang for 2Q20 that is already so incomprehensibly massive that it will eventually force shut-ins as oil prices fall below short-run marginal costs and logistical challenges arise,“ says Rystad Energy oil market analyst Milan Rudel.

North Sea

E&P companies are trying to keep oil flowing during the coronavirus outbreak while cutting back on all other activities – including maintenance. Turnarounds increase human-to-human contact adding maintenance crews typically results in more people working at the platform and more rotation.

“Given the current struggle, E&Ps are understandably trying to mitigate the coronavirus risk by implementing their version of social distancing,“ adds Rudel. Related: Saudi Arabia And The U.S. Could Form The World’s Newest Oil Cartel

Although INEOS has not yet officially decided on a new date for the FPS maintenance, except stating that it is postponed until August 2020 at the earliest, we see a case for delaying the turnaround to 2021. We incorporate a two-month delay to mid-August 2020 in our base case.

The FPS carries oil from UK and Norwegian fields in the central North Sea to Cruden Bay in Scotland. In addition, we also expect maintenance of the Scottish Area Gas Evacuation (SAGE) pipeline to be delayed in line with FPS maintenance, as several fields connected to FPS feed gas into the SAGE system. Thus, we also revise our maintenance forecast for Grane (Edvard Grieg and Ivar Aasen), Alvheim, Flotta (Golden Eagle), Beryl and Gryphon crude streams accordingly.

By Rystad Energy

ADVERTISEMENT

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News