Is There Really An Oil Shortage?

Oil Price: “I am not sure there is a supply shortage,” Khalid al-Falih, the energy minister of the world’s top oil exporter and OPEC’s largest producer, Saudi Arabia, told Reuters in the middle of May, commenting on concerns that a growing number of supply outages may have tipped the market into deficit.

Russian Oil Production Should Recover

World Pipelines: Russian production fell by 170 000 bpd from April to May, as the disruption to oil exports caused output to fall to 60 000 bpd less than the OPEC+ commitment. The last hurdle is restoring 750 000 bpd via the northern leg of Druzhba. Due to spare export capacity, however, Russian production will recover in June after falling to 11.1 million bpd in May.

Russian Oil Production Set to Recover

Oil and Gas Journal: Russian production fell by 170,000 b/d from April to May as the disruption to oil exports caused output to fall to 60,000 b/d less than the production-cut commitment. The last hurdle is restoring 750,000 b/d via the northern leg of Druzhba. However, thanks to the restoration of some pipeline flows and spare capacity in ports, Russian production will recover in June after falling to 11.1 million b/d in May, according to an analysis from ESAI Energy.

Russian Production to Recover

Hellenic Shipping News: Russian production fell by 170,000 b/d from April to May, as the disruption to oil exports caused output to fall to 60,000 b/d less than the OPEC+ commitment. The last hurdle is restoring 750,000 b/d via the northern leg of Druzhba. Due to spare export capacity, however, Russian production will recover in June after falling to 11.1 million b/d in May.

Russian Production Will Recover

Oilfield Technology: Russian production fell by 170 000 bpd from April to May 2019, as the disruption to oil exports caused output to fall to 60 000 bpd less than the OPEC+ commitment. The last hurdle is restoring 750 000 bpd via the northern leg of Druzhba. Due to spare export capacity, however, ESAI energy believes Russian production will recover in June.

US LPG Exports Set to Climb

Oil and Gas Journal: Renewed LPG demand growth in India and China will lead to growth of US exports later this year, according to ESAI Energy’s newly published Global NGL Outlook. Since exports have bumped up against capacity constraints, the timely completion of new LPG export terminals in the US and Canada will be vital to this export growth. Stronger demand has implications for propane and butane prices, whose discounts to naphtha have widened considerably.

Stumbling into Military Conflict

Hellenic Shipping News: The Joint Ministerial Monitoring Committee (JMMC) of OPEC met to assess the oil market and the impact of the OPEC+ production restraint. The committee commended the “agile and flexible approach” of the OPEC+ countries, but made no specific recommendations beyond continuing to monitor the oil market until the next meeting in June. That JMMC meeting will take place just before the full Ministerial meeting at which the member states will decide whether to continue the current production restraint. The JMMC communique pointed out “critical uncertainties” such as trade negotiations, monetary policy and geopolitical challenges. Among those geopolitical challenges are rising tensions between Iran and the U.S. since the non-renewal of sanctions waivers early this month. The possibility that the two countries could stumble into direct military conflict is rising.