Oil drops amid jobs, ignores tropical depression

Is Thirteen Unlucky?

Is thirteen unlucky? Well so far it looks like it is. Worries about the economy are overcoming fears about the loss of production from what is now being called "Tropical Depression 13." We had a big time overnight selloff on a slew of fear over the upcoming jobs reports. Weakening manufacturing globally as well as renewed European concerns and the Fed asking for plans from Bank of America and investigations of Goldman Sachs is overshadowing the shutdown of oil and gas production down in the Gulf of Mexico.

Tropical Depression 13 could become tropical storm Lee and Lee is slow moving and could cause flooding and damage in the heart of refinery row. Warm temperatures in the Gulf and a target for New Orleans is causing tropical storm warnings up and down refinery row. Tropical Depression Thirteen is already being felt on the production front as some of the largest oil platforms in the Gulf of Mexico are coming off line. Names like Thunder-horse, Mad Dog, Holstein, Atlantis, Nakika, Pompano, Horn Mountain, Marlin, Independence Hub, Constitution, Marco Polo, Red Hawk, Nansen, Boomvang, Gunnison and Neptune are shutting down. According to Reuters News the U.S. Bureau of Ocean Energy Management is reporting that 79,989 barrels per day (bpd), or about 5.7 percent of Gulf oil production, had been shut as of Thursday. In addition, 127 million cubic feet per day (cfpd) of natural gas output, or 2.4 percent of Gulf gas production. The Gulf of Mexico accounts for about 30 percent of U.S. oil supply and 7 percent of natural gas. Still some are hopeful that this storm won't do major damage and could bring much needed rain to some drought stricken regions.

According to Dow Jones Russian oil production has hit a post Soviet high. Russia produced an average of 10.28 million barrels of oil a day in August, up from 10.26 million barrels in July, hitting a new post-Soviet record. Russia's production of crude oil and gas condensate totaled 339.29 million tons, up 1.2% on the year.

Natural gas production in August stood at 45.42 billion cubic meters, dropping from 48.40 billion in July. For the first eight months of the year Russia produced 442.29 billion cubic meters of gas, up 5.1% on year. Russia produced a total of 43.46 million.

Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at pflynn@pfgbest.com.

About the Author
Phil Flynn

Senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com. Learn even more on our website at www.pricegroup.com.

 

Futures and options trading involves substantial risk of loss and may not be suitable for everyone. The information presented by The PRICE Futures Group is from sources believed to be reliable and all information reported is subject to change without notice.


Comments
comments powered by Disqus