Because the globalist like George Soros are shorting the market to make Brexit look like a catastrophe which of course it is not. Use it as an opportunity to buy
Venezuela to be down 500,000 bbl per day. US Production down. Nigeria in turmoil. The shift from surplus to to under supplied is happening down and market prices are going to shift up.
From Seeking Alpha article.
Looking at the data compiled by Bloomberg, the contraction for the last 6 months is the largest on record.
While everyone remains focused on US storage reports, very few are paying particularly close to one of the largest oil producers in the world. According to JODI, Saudi used and exported nearly 10.5 million b/d while only producing 10.2 million b/d.
Since last October, Saudi supplies have fallen by 38.6 million bbls and US stock supplies have risen by 61 million bbls.
In the coming months, summer cooling demand will also absorb an increased amount of Saudi's oil production via electricity generation. Even if Saudi's oil production rises to 10.5 million b/d, oil storage will continue to deplete. This will contribute to the much needed rebalancing we expect to take place in the second half of the year.
Once Saudi can no longer export more than they produce, export volumes to the US will fall. This will affect import figures, which will in turn affect how much storage the US builds week over week.
You can blame part of the fall in the Inventory for the Saudis on the increased use in summer but since the drop started six months ago one might assume the Saudis are lying about their production capabilities.
This should bode well for prices.
"Saudi inventories fall for longest running stretch in 15 years
Kingdom supplying the market with more oil than it’s producing
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Saudi Arabia, a country nearly synonymous with plentiful crude supplies, is offering one of the strongest signs yet that the glut that has plagued the oil market since 2014 is coming to an end.
Despite near record production, the kingdom’s oil inventories have declined for six consecutive months, the longest stretch since the Joint Organisations Data Initiative started tracking Saudi supply levels nearly 15 years ago.
“The drop in Saudi crude stocks signals the rebalancing has started,” said Amrita Sen, chief oil analyst at consulting firm Energy Aspects Ltd. in London. “Crude stocks are coming off in places where either the data is opaque or the market isn’t paying as much attention.”
Lack of spare parts, failure of the electrical grid. Drought cutting hydro power and just plan failure of the Socialist system. Personally I think production could fall even further.
Bad for Venezuela, GOOD for owners of Whiting as this just adds to the looming oil shortfall.
Today may not be a great day to buy as it is hard to say how much of the drop is related to the British vote and how much is related to the bond deal. Just holding and watching right now
The cost to drill wells at Argentina’s Vaca Muerta, site of the world’s second-biggest shale reserves, has dropped 20 percent this year, putting Chevron Corp. and its partners closer to meeting spending goals.
Drilling costs at the Loma Campana field in Vaca Muerta have declined to $11.2 million per well from $14 million in the last three months of 2015, Ali Moshiri, president for Latin America and Africa, said in an interview with Bloomberg News in Buenos Aires on Thursday. That’s putting the joint venture with YPF SA closer to its goal of drilling wells at less than $10 million, he said.
“There are a lot of companies watching Chevron and YPF in Argentina,” Moshiri said. “The performance of those wells are coming very close, very competitive to the United States.”
Oil companies including Exxon Mobil Corp. are rushing to tap Argentina’s shale reserves, the largest after the U.S., as low oil prices put pressure on producers in the U.S. Output in the U.S. has dropped this year as prices plunged, while producers in Argentina have maintained production levels because of government subsidies to stimulate extraction.
Chevron signed an agreement with state-owned YPF in 2013 to invest $1.6 billion in a pilot program to drill at Vaca Muerta in the Neuqen province. The joint venture, worth about $16 billion, has drilled about 400 wells, Moshiri said.
The government of former President Kristina Fernandez de Kirchner raised the price of oil produced domestically to $75 a barrel from $45, gave drillers tax exemptions and capped royalties at 15 percent since 2012, creating a boom in the oil industry domestically as it struggled globally because of falling prices.
“We are a long-term business; we don’t try to do anything for just a few years,” Moshiri said. “A few years ago no one knew about Chevron in Argentina. Now we are the largest investor in the oil industry.”
Whiting will now be in a position to start grabbing some distressed assets on the cheap. Could prove very positive
Thats the minimum, max is what ever the share price might be that day, currently $12.10. Of course this type of conversion is an open invitation to drive the share price down.
On the other hand they continue to provide financial flexibility to buy distressed assets cheap as they get their finances in order
During a visit to Aramco facilities in Houston, the new Saudi Arabian oil minister confirmed a growing sentiment among market analysts in recent months: the global oil glut that crippled American energy producers is now over.
Khalid Al-Falih gave declarative confirmation while touring various Houston locations this week.
“We are out of it,” Al-Falih told the Houston Chronicle.
The Saudi minister reminded the global market that an incremental upward adjustment in pricing would continue to be seen.
“The oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”
WTI back over $51 got a nice bump when EIA show a 3.2 million bbl crude inventory drop
Big beneficiary will be ultra light shale oil to be mixed with very heavy crude to make them easier to handle and refine. Oh yeah that would be us.........
Lots of those drilled but not completed Wells all likely to get fracked in the coming few months. As lean as HCLP is right now that could be a very nice thing indeed