Oil prices rose this week, pushed higher by geopolitical tension and the tropical storm in the Gulf Coast.
Friday, 12th July 2019
Roughly 30% of Gulf of Mexico production shut in. Tropical Storm Barry, which could yet turn into a hurricane, forced the shuttering of about 30 percent of the oil production in the Gulf of Mexico. About 44 percent of natural gas output was also closed down.
IEA and OPEC see surplus next year. The IEA and OPEC issued dueling Oil Market Reports this week, both forecasting a renewed supply surplus in 2020. While the figures vary just a bit, both see non-OPEC supply (mostly U.S. shale) continuing to grow at a torrid pace, outstripping demand growth. As a result, the “call on OPEC” falls next year, which raises the question about whether or not OPEC+ will need to cut output by even more than currently.
Shale industry slowing down. Top shale drillers are dialing back their growth plans in the face of production problems, financial stress and investor scrutiny. Bloomberg details a few of the production downgrades. For instance, EOG Resources…