EIA cut it’s world oil demand forecasts by 50K Bpd for 2019 and by 100K Bpd for 2020 world oil demand growth. EIA estimates production from OPEC was down 1.6 million b/d from August, the lowest level of OPEC production since November 2003 from disruptions in Saudi Arabia, down 4.0 million b/d from September 2018.
Feedstock for Saudi petrochemical companies is expected to be back to normal levels by the end of September according to two of the Kingdom’s biggest downstream users. This is earlier than expected after the attacks on the Aramco facility a few weeks ago.
Houthi rebels from Yemen launched successful drone attacks on the world’s biggest petroleum processing facility in Saudi Arabia Saturday. Reuters reports that up to 5 mbpd of production has been impacted, half of Saudi Arabia’s output. Fires reportedly under control but damages unclear.
Russian President Putin said that ahead of the OPEC+ meeting in Vienna that Russia and Saudi Arabia have agreed to extend the existing production cuts for another 6=9 months. The U.S. is near record productions and exports. The cuts promised are at 1.2 bpd by OPEC and Non-OPEC.
The Arab world’s biggest bourse, Saudi Arabia’s Tadawul exchange, third phase of inclusion in FTSE Russell’s emerging market index is set to attract about $1.58 billion (Dh5.8bn) in passive foreign inflows. KSA joined the MSCI Emerging Market benchmark last year.
The OPEC+ meeting in Vienna came at a critical time with oil prices down over 30% , a trade war in affect and Iran sanctions on. The POTUS has been brazenly telling Saudi Arabia to not cut, the U.S. has record productions and exports. The cut was promised at 1.2 bpd by OPEC and Non-OPEC.
Both the U.S. and Iran are in a tight spot with Iran’s imploding economy and impending isolation oil prices have soared to 4 year highs. Iran plans to use private companies to counter sanctions. With high oil a risk to the global economy the US is considering waivers.
Transportation of oil and gas from the Middle East can be disrupted if any of the routes are disrupted which can affect the price of crude oil in particular if they are choked off. The Strait of Hormuz is the major choke point.
Saudi Aramco announced Saturday it will resume immediately oil shipments through the Bab el-Mandeb strait that had been suspended since July 25 after two Saudi VLCCs were attacked by Yemeni Houthi militia.
Iran is in a tight spot. The U.S. pulled out of the Iran nuclear deal, its currency has fallen about 50% since and locals are protesting as they lose purchasing power. Now throw in Trump’s call to send oil exports to zero and have Saudi Arabia fill the gap. What to do, go private?