Nasty Nate to reduce crude supply
Tropical Storm Nate is going to future reduce crude oil supply as it shuts down some production in the Gulf of Mexico. This comes as Russian President Vladimir Putin says he is in favor of extending the OPEC/ NON-OPEC productions as we see more signs that U.S. shale oil output will fall back even as overall U.S. production is at a two year high right now. And according to a report, Iran, Iraq and Turkey will be working as a group to shut down Kurdish oil exports after the region elected to seek independence from Baghdad in a referendum in September. Kurdistan produces about 600,000 barrels of oil per day.
Nate is not a major storm but it is still nasty. Offshore oil and gas operators in the Gulf of Mexico are evacuating platforms and rigs in preparation for Tropical Storm Nate. The Bureau of Safety and Environmental Enforcement (BSEE) said that the “Hurricane Response Team “is activated and monitoring the operators’ activities. They report that based on data from offshore operator reports submitted as of 11:30 CDT yesterday it was estimated that approximately 14.55 % of the current oil production in the Gulf of Mexico has been shut-in, which equates to 254,607 barrels of oil per day. It is also estimated that approximately 6.42 % of the natural gas production or 206.71 million cubic feet per day in the Gulf of Mexico has been shut-in.
Reuters reports that BP and Chevron were shutting production at all platforms, while Royal Dutch Shell and Anadarko Petroleum suspended some activity. Exxon Mobil, Statoil and other producers have withdrawn personnel.
Nate is also in sites of the Louisiana Offshore Oil Port, one of the most important fuel handling facilities in the Gulf of Mexico said on Friday that it had suspended operations. The BSEE say that after the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately. Yet it will still impact inventory number this week and next.
What Vladimir Putin wants, Vladimir Putin gets. Putin favoring an extension of production cuts means that it is a done deal. If Russia and Saudi are on board the deal will get done. MarketWatch reports that Saudi King Salman is currently on a visit to Moscow, a first for a Saudi monarch. Saudi Arabia, a heavyweight member of the Organization of the Petroleum Exporting Countries, and non-OPEC member Russia were expected to discuss a possible extension of production cuts.