Norwegian Oil Workers on Strike and Hurricane Delta
October 8, 2020
The energy markets are higher this morning as concerns about Hurricane Delta shutting production down, and the Norwegian oil workers’ strike impacting production are the currently the concerns.
Hurricane Delta has now shutdown roughly 1.5 million bpd of daily output.
The largest oilfield in the North Sea, Johan Sverdrup will have to close down unless the workers strike ends by October 14th. Currently there are 6 facilities that are closed and that is roughly 330,000 bpd of production.
The market is also getting some buying on the hope that a stimulus measure of some sort is back on the table. The Fed said that some action is essential to keep the economic recovery going from the impact of COVID-19 shutdowns.
The DOE inventory report said crude oil stocks were up 501,000 barrels, gasoline stocks were down 1.435 million barrels and distillate stocks were down 962,000 barrels. Cushing, Ok crude stocks were up 470,000 barrels.
Total crude oil stocks are at 492.927 million barrels 67.358 million more than last year. Gasoline total stocks are at 226.747 million barrels 2.016 million less than last year at this time. Total distillate stocks are now at 171.796 million barrels 44.472 million more barrels than last year at this time.
US propane stocks showed a surprise draw of 117,000 barrels putting total stocks at 101.842 million barrels which is 5.487 million more than last year. Midwest stocks were down 829,000 barrels putting total stocks at 27.003 million which is 469,000 less than last year. Gulf Coast stocks were up 169,000 barrels putting total stocks at 59.708 million which is 2.008 million more than last year. Total propane stocks are good but the breakdown by market has the Midwest a bit below last year and a bit of a concern. But production is still strong at 2.259 million bpd. The majority of forecast are saying October will be above normal so the chance for more increases in stocks is possible with the biggest unknown being exports that could impact this situation.
The crude oil and refined fuels products market are still stuck. Up one day and down the next just continuing to trade in their ranges. The market needs some big news or big event to bust it out of these ranges in one direction or the other.