Energy Outages Impact US Oil Production
February 17, 2021
Estimates for today DOE inventory report are for crude to be down 2.440 million barrels. Gasoline up 1.260 million barrels and distillates down 1.876 million barrels.
OPEC sources are suggesting that supply curbs will likely ease after April given the price recovery. But Saudi Arabia’s Abdulaziz bin Salman cautioned that producers must remain “extremely cautious.”
Energy outages and the extreme cold has impacted about 2 million barrels per day of US production and also cut more than 3 million barrels per day of refining capacity. Estimates are saying it may take a couple weeks or more for the majority of well to rebound.
UBS raised all of its oil forecast by $5 per barrel and now expects Brent crude to trade at $65 per barrel by mid-year, $68 in the second half of 2021 and $70 by March of 2022. It expects WTI crude to trade at a $3 dollar discount to Brent.
The EIA stated that Bakken oil production in March is seen down 18,000 bpd at 1.157 million barrels per day. Eagle Ford oil production is expected to fall by 16,000 bpd to 1.009 million bpd while Permian Basin oil production is expected to fall by 5,200 bpd to 4.315 million bpd.
The extreme weather continues to be the focus of the market and has caused numerous issues and challenges for the entire system.