The oil market is facing a prolonged disruption to Saudi Arabia’s oil production with few options for replacing such huge output losses.
The halt of 5.7 million barrels day of the kingdom’s production — the worst sudden supply loss in history — exposes the inadequacy of the rest of the world’s supply buffer.“The market is in scramble mode to secure not only supplies of crude, but also products,” consultant JBC Energy GmbH said in a note. Prices are “reflecting a new geopolitical risk premium, namely that the safety of oil production in the heart of the Middle East cannot be guaranteed.
According to Bloomberg calculations based on publicly available data, the absolute maximum in spare capacity that could be brought into production in the coming weeks is about 3.9 million barrels a day. The Organization of Petroleum Exporting Countries is in regular contact with the Saudi authorities, the group’s Secretary-General Mohammad Barkindo said in a Bloomberg TV interview. It’s premature to talk about reversing the oil-production cuts implemented by OPEC and its allies, he said.
Crude prices pared gains on Tuesday, following an extraordinary trading day in which Brent crude leaped settled a record 15 per cent higher at just above US$69. Futures were 0.3 per cent lower at US$68.80 a barrel as of 8:44 a.m. in London as the market waited for any further update from Aramco.
Gee, if only there was an oil rich country who could fill the void. Build the pipeline.
Betting this will be a long drawn out back and forth seems 2020 should be a dark year for economic growth
Wouldn’t effect Canadians is we produced, refined and transported our own oil across the Country 🙄
Did anyone know that Canada has a lot off oil, clean oil not blood oil
A quick look here shows a way, And as an added bonus, We can disconnect from a really corrupt country, 'and' start using a more enviourmentally processed product.
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