Schlumberger to Sell Fracking Business
September 2, 2020
The inventory update from the API showed draws across the board. Crude stocks were down 6.4 million barrels and the estimates for today’s DOE numbers from the Reuters survey is for stocks to be down 1.9 million barrels. In the API report gasoline stocks were down 5.8 million barrels and the estimate for today is for them to be down 3.0 million barrels. Distillate stocks in the API report were down 1.4 million barrels and the call for today’s DOE inventory update is for them to be down the same 1.4 million barrels.
The inventory report appears to be the market focus today as there is little other major news. I guess in the background everyone needs to keep an eye on what appears to be an active Atlantic as several disturbances are currently there.
According to a Reuters survey, OPEC’s oil production increased by about 1 million bpd in August as the group and its allies eased record oil supply cuts. The 13 members of OPEC produced 24.27 million bpd on average in August, up 950,000 bpd from July’s figure and further increase from a three-decade low reached in June. In August, OPEC countries bound by the deal delivered 99% of the pledged reduction, up from a revised 95% in July.
Schlumberger agreed to sell its North American shale fracking business to Liberty Oilfield Services. The sale come less than three years after Schlumberger sought to increase hydraulic fracturing through a $430 million purchase of rival’s fracking equipment.
Estimates for today propane inventory update from OPIS is for stocks to be up 2.06 million barrels. The five year average for this reporting week is stock up 2.348 million barrels.
Reuters reports that Iraq is seeking an exemption from an OPEC+ deal cutting production during the first quarter of 2021 but will adhere to cuts over the next three months.
The big decline in inventory over the last few reports should continue today offering support to prices and the general sentiment that stocks are tightening despite COVID-19 impacted demand.