How OPEC Was Hurt By The Hurricanes

Hurricane Irma was downgraded to a tropical storm early Monday, although it is still bringing floods and damage to much of Florida as it makes its way north, leaving millions without power. As for the oil market, the impact of the storm will be felt almost exclusively on demand, with little to no effect on crude oil production or refining. Goldman Sachs estimates that Hurricanes Harvey and Irma will leave a huge dent in oil demand, an effect that will be felt across the world. The two storms will lead to a reduction in global oil consumption by…

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The North Sea Oil Recovery Is Dead In The Water

The oil majors issued a vote of confidence for the North Sea in recent days, citing precipitous declines in the cost of production, which they say will revive the region’s oil and gas production. At an oil industry conference in the North Sea’s oil capital, Aberdeen, the chief executives of BP and Royal Dutch Shell both offered bullish assessments for the turnaround underway off the coast of Scotland. BP’s Bob Dudley said the North Sea is “back to growth,” according to the FT. The North Sea has long been a costly place…

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What Happens If The OPEC Deal Expires?

OPEC appears to be nervous that its production cut deal will once again fall short, and the group is already discussing the possibility of yet another extension. While the aftermath of Hurricane Harvey continues to drive headlines in the energy sector, the attention will once again shift back to OPEC as the year wears on and we head into 2018. OPEC had hoped that a nine-month extension of its original six-month production cut deal – 1.2 million barrels per day from OPEC, plus reductions of nearly 0.6 mb/d from non-OPEC countries – would…

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Oil Markets Need To Plan For EV Dominance

There will be more than a billion electric vehicles on the road by 2050, according to Morgan Stanley, adding one more voice to notion that the EV revolution is coming. The investment bank says that despite hiccups for many EV models to date, Tesla’s success thus far “shows that the consumer preference for internal combustion engines can be swayed.” Morgan Stanley analysts go on to add: “technology and usability are improving, and charging times are falling. There will come an inflection point where range and usability combine…

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Hurricane Irma Could Destroy Oil Demand

About half of the shuttered refining capacity along the Gulf Coast could be back up and running by Thursday, assuaging concerns about the possibility of acute gasoline shortages in much of the U.S. The disruptions of more than 4 million barrels per day of refining capacity have been cut in half, with major refineries restarting operations in Corpus Christi and Houston. ExxonMobil is ramping up operations at its Baytown facility, the second largest in the country. Valero Energy brought two refineries in Corpus Christi and Texas City back online,…

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U.S. Oil Inventories Set To Spike After Hurricane Harvey

The people along the coast of Texas are trying to assess the implications of the toxic stew that Hurricane Harvey unleashed, with exploding chemical plants and flooded superfund sites threatening long-term environmental damage to the region. The extraordinary concentration of oil and gas facilities along the coast of Texas has long been trumpeted as an economic and energy security advantage, but in many ways, it exposes the region’s – and the country’s – dependence on fossil fuels as well as its very real vulnerability to…

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Looming Gas Shortage: “Imports Can’t Make Up For This”

The East Coast will start feeling the effects of Hurricane Harvey as the gasoline supplied from the Gulf Coast starts to dry up. One of the most important pipelines that ships refined products to the Eastern Seaboard shut down on Thursday, which means that the U.S. Southeast, Mid-Atlantic, and Northeast could see supply disruptions and price increases. The Colonial Pipeline carries gasoline, diesel and jet fuel from several refineries in Houston, Port Arthur and Lake Charles, along the Texas and Louisiana Coast, up through the U.S. Southeast to…

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European Refiners Set To Benefit From Gulf Coast Chaos

The refinery outages from Hurricane Harvey have left a very large, if temporary, void in the refined product supply, a space set to be filled by refiners located far from the flood ravaged coast of Texas. European refiners stand to benefit from the disruptions, as a sudden shortfall in refined products has led to a surge in margins. European refiners are expected to ramp up capacity and exports to fill the gap, enticed by surging prices. Crack spreads for European gasoline are at a two-year high, according to PVM Oil Associates, and at a record…

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Texas Shale Hit Hard By Hurricane Harvey

Crude oil prices are taking a serious hit from Hurricane Harvey, slammed on multiple fronts at a time when benchmark prices were already showing some signs of strain. As has already been widely noted, Hurricane Harvey has knocked out major refineries along the Gulf Coast. Goldman Sachs said in a research note that an estimated 3 million barrels per day of refining capacity was offline, as of Monday. On Tuesday, ExxonMobil began winding down some operations at its Beaumont, TX refinery as the storm headed east towards eastern Texas and Louisiana.…

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