Oil

[KillerGoose]

(05-25-2022, 12:19 PM)Stewy Wrote: More:  Under the label of "Things Beyond Anyone's Control, that will affect Oil Prices"

Oil fields require maintenance and upgrading with time, especially since many of them have 30+ year lifespans. Kazakhstan a member of OPEC owns one of the largest oil fields in the world, called Kashagan.  Recent weather interruptions in the Spring called for upgrades to mitigate weather and routine maintenance are going to take it completely offline for months.  Recently Kazakhstan has been one of the few OPEC members producing MORE than it's quota vs. most of OPEC that is producing less than quota.  The maintenance has to happen now, and it is the worst time to do it, but it is unavoidable.  Over 1 million barrels per day could temporarily go offline for months.  That isn't going to help prices.

https://oilprice.com/Latest-Energy-News/World-News/Oil-Production-Halves-At-Kazakhstans-Giant-Kashagan-Field.html

This is why blaming our politicians or even our oil companies for these high prices is ludicrous.  While many companies in the consortia are known names, turning off the taps hurts these companies, not helps.  Also no one company is in control, it is controlled by a consortia, where the highest stake holder is the Kazakhstan national oil company, which means they have more influence than the other companies to make decisions over the likes of Exxon, Shell (Dutch), TotalEnergies (French), CNPC (China), Inpex (Japan), etc.  Energy is Kazakhstan's largest money maker so taking this field offline is the last thing they want to do, but sound oil field practices require it now.  Also, these  kinds of maintenance decisions are years in the making prior to execution because they are expensive and require materials to be on hand before stating.

Anyway, just thought I'd share, because this is one that's going to exacerbate an already big problem, but you'll likely not hear about it in from any of your normal news sources.

Thanks for this, Stewy. Hadn't heard about this. I'm involved in our S&D meetings weekly but we haven't had one in a couple of weeks so I haven't heard much in the way of market updates. This is such a frustrating topic to try to have with people who don't understand the industry. It is surely going to turn into a political weapon which just isn't accurate. Any explanation typically falls on deaf ears I.E. "it just has to be Biden's fault". It's a lazy take. 

I have been wondering if we could surpass ATH. We've stabilized around $113 for Brent but as we go into summer with Russia sanctioned off and Kazakhstan cutting production, I suspect we won't be here for long. Nat gas has gone crazy, too.