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The Oil Markets Are At A Confusing Crossroads

The Oil Markets Are At A Confusing Crossroads

The latest IEA report suggests…

Brazil Oil And Gas Production Reach Record Highs In September

Offshore rig

The Brazilian government on Friday reported that its oil and gas production rose to record levels in September with a total oil equivalent of 3.36 million barrels per day (bpd).

According to data from the Agência Nacional de Petróleo, Gás Natural e Biocombustíveis (ANP) energy regulators, September oil output reached 2.67 million bpd, which represents a monthly jump of 2.4 percent and an annual increase of 11.5 percent.

Production from the offshore Lula oil field located in the Santos basin grew to 639,700 million bpd in September; thus, beating the monthly record for a Brazilian oil field previously obtained by the Marlim site in 2002.

While oil output rose for the fourth straight month, natural gas production in September climbed to 110.4 million cubic meters per day (cmd). This represents 1.5 percent more than the mount reached in August and a 13.4 percent spike compared to September 2015.

Output from the sixty-six wells in pre-salt fields in the ninth month of this year was around 1.17 million bpd and 46.1 million cmd of natural gas for a total oil equivalent of some 1.46 million bpd. This marks an increase of 7.3 percent compared to August based on ANP figures.

Related: Pirates Threaten Oil And Gas Shipping In The Red Sea

The ANP data is a breath of fresh air for a Brazilian oil industry burdened by low global prices, and the “Lava Jato” probe looking into corruption at state-owned firm Petrobras. Petrobras will likely continue being the main energy player in Brazil, and the expected multibillion-dollar renegotiation of a contract with the government could help boost investor confidence in the company. Meanwhile, the fact that Petrobras is no longer required to be the operator of all new exploration and production projects could lead to greater interest from foreign oil companies in Brazil.

The push for stronger output by Brazil stands contrary to the Organization of the Petroleum Exporting Countries (OPEC) campaign to limit supplies in order to boost prices. As we reported on Tuesday, as far as Brazil is concerned “any call from OPEC – or even a plea for help – is likely to fall on deaf ears, regardless of appearances and general statements of understanding.”

By Erwin Cifuentes for Oilprice.com

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