The Master Resource Report will be taking a two week vacation.
The report will not be published September 6th or 13th.
The price of oil
From the Financial Times: “The oil markets have begun to price in the risk of military action,” said Michael Wittner, head of global oil research at Société Générale. He predicted that Brent prices would rally to $120-$125 a barrel in the next few days in the event of a strike on Syria, and could rise to $150 if the action leads to greater disruption in the rest of the Middle East.”
The focus is on Syria but the real problem is production disruption from other producers. One of the most significant is Libya where over 1 million barrels per day of exports are halted.
At the start of the year the country was forecasting a complete return to level prior to the overthrow of Muammer Gaddafi in 2011. But oil production has fallen from 1.4 million barrels per day at the beginning of the year to 250,000 or less barrels per day. That is nearly the equivalent of eliminating the production from North Dakota and the Eagle Ford in Texas.
Add in the production troubles in the UK North Sea, Nigeria, Iraq, sanctions on Iran and the global supply picture shows why the price of oil was already climbing before the talk of war with Syria. The situation in Syria can only make a tight market even worse.
Limiting factor – Super Puma’s
The safety troubles with the Super Puma’s used to fly crews and supplies out to North Sea oil platforms may soon become a problem for production.
The key takeaway is that North Sea production is suscetible many sources of distruption as the complexity and expense continue to increase. This week’s report looks at the latest UK Oil & Gas report on status of the UK’s oil and gas production.
The Oil Drum
It is time to say both goodbye and thank you to The Oil Drum which moves to archive status this weekend. Kate Mackenzie writing for FTAlphaville wrapped it all up pretty well with her comments yesterday.
So thank you to everyone who worked on and contributed to The Oil Drum. The issues remain and the discussion won’t end. It is just that TOD won’t be in the middle of it any longer.