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Oil edges further above $64 on doubts over Saudi supply

Oil rose further above $64 a barrel on Monday, supported by doubts about how quickly Saudi Arabia can restore output after a crippling attack this month and a resulting greater focus by investors on supply risks. Despite efforts by the top crude exporter to reassure the market it can resume full production by the end of September, state oil company Saudi Aramco has asked some customers to switch crude grades and delay shipments. “The geopolitical risk premium has returned with a vengeance and supply-side developments have been thrust back into ...

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Crude’s storm in a tea cup moment?

Does oil really matter? If the answer is yes, then the other question is to what extent. Markets reacted violently to the loss of some 5.7 million barrels per day (bpd) from the global crude supplies, following the ‘drones’ attack on Abqaiq plant and the second-largest Saudi oil field Khurais. Abqaiq is crucially important to Saudi crude exports. It is the world’s largest oil processing facility and crude oil stabilisation plant, with a capacity of more than 7m bpd. The process is a form of partial distillation, to sweeten the ...

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Analysis: Saudi disruptions expose Asia’s deficient emergency oil reserves

The attacks on Saudi Aramco’s oil facilities have exposed Asia’s vulnerabilities in absorbing supply disruptions with purpose-built emergency stocks, which either don’t exist or fall short of global standards. While organizations like the International Energy Agency have coordinated strategic petroleum reserves in member countries, most Asian countries are not IEA members and are unable to fund expensive long-term storage programs. This is problematic because Asia is the largest driver of oil demand growth, and its exposure to Middle East oil supply has grown more rapidly than Europe or the US ...

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After Abqaiq, analysts see higher oil price risk premium, more supply disruptions

The unprecedented attacks on Saudi oil facilities over the weekend are widely viewed by analysts as the most significant supply disruption the oil market has ever seen, increasing the geopolitical risk premium in prices. But opinions vary on just how much it has or will increase. Much of the debate centers on whether the market has already priced in the risk or most traders are simply awaiting another substantial near-term disruption, an outcome analysts view as almost inevitable. Analysts told S&P Global Platts Thursday that they view the attacks, which ...

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Energy transition dampens appetite for Asian mega-refinery projects

Asia has been the last bastion of large oil refinery projects for years, but overcapacity in the near term and the decarbonization of transport fuels further out have raised questions over the need for more large-scale refining projects. China and the Middle East are still adding new capacity that will come online in the next three to four years. But most of these projects were approved when the global economic outlook was still robust, and the roster of new project approvals looks bleak. As oil majors diversify into the power ...

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Saudi attack, geopolitics and oil markets

The attack shows that other critical elements of the supply chain are more easily disrupted than we imagined. Simon Flowers Chairman and Chief Analyst Perhaps a false sense of security had crept in. Plentiful oil supply, carefully stewarded in 2019 by OPEC+ to get the market closer to balance, and moderate prices. Rising geopolitical tension,even around Iran, seemed a nebulous threat. The events of last Saturday shattered any complacency. So what does the attack on Saudi Arabia’s infrastructure mean for oil market dynamics? I mulled over the question with Ann-Louise ...

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Saudi attacks roil physical crude market more than paper futures

As the dust continues to settle from the weekend attacks on Saudi Arabia’s main oil processing facility, it’s worth noting the price reaction for physical crude told a somewhat different story to that of the futures market. Commentary and analysis in the wake of the weekend strikes that knocked some 5.7 million barrels per day of production offline was concentrated on the 15% surge in global benchmark Brent futures, the biggest jump in more than 30 years. There’s nothing wrong with this focus, as futures trading is where the market ...

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US to contribute 24% of new-build capacity growth to global gas processing industry by 2023, says GlobalData

The US is expected to drive new-build gas processing capacity growth in the global gas processing industry from planned and announced (new-build) projects between 2019 and 2023, contributing around 24% of global gas processing capacity growth by 2023, according to GlobalData, a leading data and analytics company. The company’s report, ‘Global Capacity and Capital Expenditure Outlook for Gas Processing Plants – The US Leads Global Gas Processing Capacity Additions’, reveals that the US is expected to have a new-build gas processing capacity of 16.9 billion cubic feet per day (bcfd) ...

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Asian prices near $6 per mmBtu on higher European gas, oil prices

Asian spot prices for liquefied natural gas (LNG) rose to a more than six-month high this week, tracking gains in the European gas market and as oil prices gained after attacks on Saudi Arabia’s crude oil facilities over the weekend. Spot prices for November delivery to Northeast Asia LNG-AS are estimated to be about $5.80 per million British thermal units (mmBtu), down by 20 cents from last week, said several sources who participate in the market. Spot prices are currently at their highest since March, Reuters data showed. October prices ...

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Saudi Aramco has come out of the attacks “stronger than ever” – CEO

Saudi Aramco has emerged from the Sept. 14 attacks on its oil facilities “stronger than ever”, chief executive officer Amin Nasser told employees in a message. “The fires that were intended to destroy Saudi Aramco had an unintended consequence: they galvanized 70,000 of us around a mission to rebound quickly and confidently, and Saudi Aramco has come out of this incident stronger than ever,” said the message, released on the occasion of the Saudi national day, to be celebrated on Sept. 23. Source: Reuters (Reporting by Rania El Gamal and ...

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Number of U.S. active drilling rigs decreases this week

The number of active drilling rigs in the United States fell by 18 to 868 this week, 185 rigs down year on year, according to the weekly data released by Baker Hughes on Friday. According to the Houston-based oilfield services company, these active drilling rigs included 719 oil rigs operating in the U.S. oil fields, down 14 from the previous week; 148 gas drilling rigs, down five from the previous week; and one newly added miscellaneous rig. Of the 868 rigs, 842 are land drilling rigs, down 18 from the ...

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Saudi Aramco hires UBS, Deutsche as bookrunners for its IPO-sources

Saudi state oil company Aramco has hired UBS Group and Deutsche as bookrunners for its initial public offering, two sources familiar with the matter said, in a sign that the deal is moving ahead despite a recent attack on Saudi oil facilities. Aramco has started informing banks about the bookrunners’ roles, one of the sources said. Aramco finalised nine banks for top roles as global coordinators in recent weeks, Reuters has reported. More banks are expected to be named in junior roles, the sources said. Aramco has also added Barclays ...

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Filling Aramco’s crude orders will get tricky if repair timetable slips

Saudi Arabia’s pledge to fulfill all commitments to oil buyers after a strike on the giant processing plant at Abqaiq means the world’s largest crude exporter must continue to draw heavily on its inventories until production capacity returns. State oil company Saudi Aramco has more than enough oil to get it to the end of the month, when it’s promised to restore normal levels of production. But if that timetable slips, things could get trickier. Aramco removed nearly 10 MMbbl of oil from storage — mostly from tanks at Yanbu, ...

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Permian Oil Production Growth to Continue: 5 Stocks in Focus

For several years now, the Permian basin has been considered the most significant shale field in the United States. While the blistering pace of drilling and output growth have slowed down of late under investor demand to focus on enhancing returns, the region is by far the primary driver of production growth in the U.S. Crucially, volumes from this low-cost, premier unconventional play will continue to increase and break new record for many years to come, reflecting its status as the dominant domestic growth area for onshore oil production. Permian ...

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Conflict In The Middle East – How The Shale Gas Revolution Gives President Trump Room To Maneuver

The recent attack on key Saudi oil installations, allegedly performed by drones, instantly destabilized the energy world. Simultaneously, it highlighted once again the importance of the shale revolution both to the United States economy and American national security. Oil experts believe that 50% of Saudi oil capacity was disrupted by the attack, which was initially blamed on Houthi rebels in Yemen but may have been directed, if not actually carried out, by Iran. That amounts to 5 million barrels of oil a day, and constitutes approximately 5% of the world ...

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