• 7 days Retail On Pace For Most Bankruptcies And Store Closures Ever In One Year: BDO
  • 10 minutes America Could Go Fully Electric Right Now
  • 9 days Majors Oil COs diversify into Renewables ? What synergies forget have with Solar Panels and Wind Tirbines ? None !
  • 54 mins Most ridiculous green proposal
  • 15 hours The Green Hydrogen Problem That No One Is Talking About
  • 6 hours Biden's laptop
  • 1 hour QUESTION: With worldwide 1.4 Billion passenger vehicles and 360 Million commercial vehicles using combustion engines how long before gasoline and distillates measurably decline. .
  • 1 hour Rethinking election outcomes for oil.
  • 3 hours The City of Sturgis Update on the Motorcycle Rally held there, and the MSM's reporting hence
  • 1 day China Sets Its Sights On Global [EV, AI, CRISPR, Fusion, Navel Lint Collector] Dominance
  • 3 hours Video Evidence that the CCP controls Joe Biden
  • 8 hours DOJ confirms FBI investigating Hunter Biden since last year for money laundering.
  • 16 hours Making diamonds from thin air
  • 10 hours P@A will cost Texas Taxpayers $117 Billion.
China And India Drive Oil Demand Recovery

China And India Drive Oil Demand Recovery

With COVID cases climbing and…

Oil Plunges To $35 As Lockdowns Return

Oil Plunges To $35 As Lockdowns Return

Oil prices extended their 5-percent…

Rystad Energy

Rystad Energy

Rystad Energy is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products. Rystad Energy’s…

More Info

Premium Content

The Oil Glut Is About To Get Even Worse

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

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