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Page added on July 12, 2018

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Potential supply shortages lead to oil prices increase

Production

Oil prices have increased due to a potential supply shortage in part due to sanctions, production losses, and impending strikes.

Brent crude oil prices jumped 55 cents, or 0.7%, to reach $78.62 a barrel, continuing its upward growth after rising 1.2% on the previous day, while US light crude futures rose 47 cents, or 0.7%, to trade at $74.32, Reuters reported.

Around 670 workers on Norwegian oil and gas offshore rigs are set to go on strike on 10 July 2018 after rejecting a proposed wage deal.

Attempts failed to broker a truce and reach a deal between trade unions, Safe and YS, and the Shipowners’ Association that represents the rig employers, the news agency reported.

The strike is expected to affect the production at Shell’s Knarr field, which produces 23,900 barrels per day.

“It is likely that concern will support prices all through the summer, while demand continues to be strong during the summer peak.”

It will potentially add to disruptions in oil production caused by tensions in the Middle East as the US intends to stop oil exports from Iran by November.

Last month, the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia reached an agreement to raise output to address supply concerns resulting from production losses in countries including Libya, Canada, and Venezuela.

Analysts are concerned that increased Saudi Arabia production to counter the losses from Iran will use up global spare capacity, leaving markets more vulnerable to further production declines.

IHS markets energy vice-president Victor Shum was quoted as saying: “The bottom line becomes the available spare capacity within OPEC…and the markets have started to focus on that.

“It is likely that concern will support prices all through the summer, while demand continues to be strong during the summer peak.”

Recent oil port closures resulted in Libya’s national oil production declining to 527,000 barrels per day from 1.28 million bpd in February.

offshore-technology.com



7 Comments on "Potential supply shortages lead to oil prices increase"

  1. Duncan Idaho on Thu, 12th Jul 2018 7:03 pm 

    Yep, if you are paying attention, you can see where this is going.

  2. MASTERMIND on Thu, 12th Jul 2018 7:26 pm 

    The average price of a barrel of oil during the entire 20th century was 20 dollars (inflation adjusted)..That is around 1.25 gallon gasoline in today’s terms..Now gasoline is around 3 dollars a gallon where I live..This is called an “Oil Shock”…And the media is silent..

    And if you think prices are high now..You ain’t seen nothing yet..

    The mother of all oil spikes is coming!

    Peak oil part two..And it will break the world economy..And it will usher in Martial Law!

    And whether its a left boot or right on your throat will make no difference!

  3. Makati1 on Fri, 13th Jul 2018 8:58 am 

    $100 oil by Christmas? Bring it on!
    $150 oil by Easter? Bring it on!
    $200 oil by the 4th of July? Bring it on!

    The best thing that could happen for planet earth is for the oil industry to be shut down, or at least shrunk to necessities.

  4. MASTERMIND on Fri, 13th Jul 2018 9:41 am 

    Madkat

    Without oil you can’t grow any food word wide..The soil has been ruined from using petro chemicals for years..And it would take several decades of organic inputs to fix it..

    You are so dense and your arguments are self defeating..

  5. Sissyfuss on Fri, 13th Jul 2018 9:41 am 

    Brent currently at $74.88. Seems that manipulating the price to keep it in the Goldilocks zone is still in effect.

  6. Makati1 on Fri, 13th Jul 2018 9:58 am 

    MM, do you ever think? You assume shit that is blatantly wrong. Your delusions are fed by the propaganda mill you live in. Billions grow food without chemicals or oil. Billions.

    Yes, the petrochemical farms in America will not produce much. You assume that oil is going to disappear overnight. Not going to happen short of a nuclear war. LMAO

  7. MASTERMIND on Fri, 13th Jul 2018 10:11 am 

    Madkat

    Billions do not grow food with oil and petro chemicals..There is only a sliver of organic farms in the world and the majority are in Australia..There are ten calories of hydro carbon energy for every one calorie of food that is produced..

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