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Page added on August 6, 2018

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Something Strange Is Happening In The Saudi Oil Patch

Production

Saudi Arabia may have started to fill up its oil tanks, export and domestic consumption data suggests, as cited by Bloomberg’s Julian Lee. Traditionally, the summer months are the season of peak local consumption of crude, Lee notes, as air conditioning demand hits a high. However, this year temperatures have been below the five-year average for the period, and exports have not registered any marked increases, either.

Saudi Arabia has abundant storage capacity and over the last three years, stockpiles have been falling, from more than 300 million barrels to less than 250 million barrels, according to data from JODI quoted by Lee. At the end of April this year, they stood at the lowest level since 2011, but in May they went up for the first time since last November. They may well have continued to rise in the following months as well.

At the same time, Reuters cited two unnamed sources from OPEC as saying Saudi crude oil production in July fell by 200,000 bpd instead of rising, as per the OPEC+ agreement from June 22. This is a surprising turn of events after Saudi Arabia assured importers that India and the United States it would ramp up production quickly and solidly.

The decline is all the more surprising after Saudi reports to OPEC that the Kingdom boosted production in June by as much as 500,000 bpd, to 10.488 million bpd. Secondary sources data for June actually showed Saudi Arabia had produced an average of 10.42 million bpd, which was 405,400 bpd more than in May—still a substantial increase.

Saudi Arabia has storage capacity in excess of 40 million barrels of crude, both at home and abroad. Its biggest storage terminal is Ras Tanura, with 33 million barrels. Another major storage hub is the King Fahd terminal, with a capacity of 12.5 million barrels of crude. If Saudi Arabia has started replenishing these, it will gain a certain edge over competitors after the Iran sanctions begin to take their toll on international prices.

By Irina Slav for Oilprice.com



16 Comments on "Something Strange Is Happening In The Saudi Oil Patch"

  1. print baby print on Mon, 6th Aug 2018 1:42 pm 

    They try to stabilize prices. Ksa doesn’t have any more spare capacity- 2mlbpd -dream on

  2. Dredd on Mon, 6th Aug 2018 3:21 pm 

    Measurements.

    If they are using “toys” to measure, rather than tools, they are toying with us (Tools, Not Toys).

  3. Boat on Mon, 6th Aug 2018 3:28 pm 

    Print

    Yes and 10 years ago they were supposed to be out of oil. Hehe

  4. print baby print on Mon, 6th Aug 2018 3:54 pm 

    Boat I agree with you on that , a lot of wrong calculation but this time I think we are on the brink. For the last 10years we all drive the less and bau continued in the next couple of years it will change

  5. twocats on Mon, 6th Aug 2018 4:39 pm 

    disagree. no one ever said 10 years ago they’d be out of oil. not even simmons. but they didn’t peak either. what the “calculations” didn’t anticipate was the all-out blitz to maintain production at all costs, no matter the risks or outcome. everyone is trading depletion for production.

    it’s almost as if countries are more afraid of “peak” itself and its psychological impact than they are of actual post peak decline. because what they are setting up for is an absolutely colossal collapse in production, a seneca cliff, after which the lights will go out very quickly and so I guess it won’t really matter what they did.

    2008 people were still thinking in modern capitalist terms. we’ve entered a global command-control economy that has never been experienced. of course, the reason you feel its on the brink print-baby is because it is. not only is the geology a bit sticky right now, the politics is dismal – right wing nationalist politics are all the rage. hard to coordinate a global command economy with that happening.

  6. Duncan Idaho on Mon, 6th Aug 2018 5:37 pm 

    2008 people were still thinking in modern capitalist terms. we’ve entered a global command-control economy that has never been experienced.
    Yep– oil futures are hard to predict– but we are dealing with geology here.

  7. MASTERMIND on Mon, 6th Aug 2018 7:54 pm 

    The Planet Is Dangerously Close to the Tipping Point for a ‘Hothouse Earth’

    https://www.livescience.com/63267-hothouse-earth-dangerously-close.html?utm_source=notification

  8. MASTERMIND on Mon, 6th Aug 2018 8:32 pm 

    In 2008, America Stopped Believing in the American Dream

    http://nymag.com/daily/intelligencer/2018/08/frank-rich-2008-financial-crisis-end-of-american-dream.html

  9. print baby print on Mon, 6th Aug 2018 11:20 pm 

    Tcats yes a lot of people actually said that . I have red a lot of articles. Even by some of those counts we should have been in minus territory by now, and not producing any but that is not the case.

  10. Cloggie on Tue, 7th Aug 2018 4:05 pm 

    Oil, yawn.

    Saudi-Arabia offers Iraq solar electricity for 2 cent/kWh. KSA to build a 3 GW solar power station in their desert and offer electricity 4 times cheaper than Iran:

    https://www.bloomberg.com/news/articles/2018-07-29/iraq-says-saudis-to-sell-it-power-at-a-fraction-of-iran-s-price

    http://www.wattisduurzaam.nl/5969/energie-opwekken/zonne-energie/zonnestroom-mexico-duikt-4-dollarcent-per-kilowattuur/

    Source: Bloomberg

  11. deadly on Tue, 7th Aug 2018 6:04 pm 

    Who cares what is happening in the Saudi Oil Patch, even if it is something strange?

    Ghostbusters?

    The Houthis need to infiltrate, gain information, attack the two terminals with armed drones when the storage terminals are filled to the brim.

    Oil will gain another five dollars.

    Good money to be made. War is a racket, war is always good bidness and the bidness is always good.

    The arms dealers will be busy.

    Oil companies will make millions.

    Business as usual, more war is always for the good of humanity.

    Might cost an arm and a leg, but what the heck?

  12. MASTERMIND on Tue, 7th Aug 2018 6:58 pm 

    Clogg

    Solar doesn’t work well in the dessert..Its too hot for the panels to work..And there is too much CO2 pollution in the air already..(Womp Womp)

    Desert sun in Qatar too hot for solar panels to work
    https://www.thetimes.co.uk/article/desert-sun-in-qatar-too-hot-for-solar-panels-to-work-h23kmktbp

    Air Pollution Casts Shadow over Solar Energy Production
    http://pratt.duke.edu/about/news/solar-pollution

  13. MASTERMIND on Tue, 7th Aug 2018 7:03 pm 

    $90 Oil Is A Very Real Possibility

    In other words, the oil market could see a disruption in Iranian supply at the same time that U.S. shale output is slowing down. All the while demand continues to grow.

    https://oilprice.com/Energy/Energy-General/90-Oil-Is-A-Very-Real-Possibility.html

  14. Cloggie on Wed, 8th Aug 2018 12:39 am 

    Solar doesn’t work well in the dessert..Its too hot for the panels to work..

    BS.

    https://www.civicsolar.com/support/installer/articles/how-does-heat-affect-solar-panel-efficiencies

    Name plate power solar panels is always measured at temperature 25 C (STC = Standard Test Condition temperature)

    From there efficiency decreases with ca. 0.26 %/degree Celsius. In other words in an environment of 45 degrees Celsius you have a loss of 20 x 0.26 = 5%.

    Irrelevant.

    As per usual our satanic forum bolshevik has no clue.

  15. Antius on Wed, 8th Aug 2018 1:59 am 

    “Saudi-Arabia offers Iraq solar electricity for 2 cent/kWh. KSA to build a 3 GW solar power station in their desert and offer electricity 4 times cheaper than Iran”

    …For 12 hours out of 24. It works if and only if the consumer is prepared to make demand side adaptations. Otherwise, the real power supply ends up being gas turbines, with solar panels used to reduce the fuel bill. Not entirely useless, but still basically a fossil fuel power source.

  16. Cloggie on Wed, 8th Aug 2018 3:00 am 

    Renewable power generation sources are now de eloped enough, although further price decreases are very well in the cards.

    All innovation efforts should be concentrated on storage:

    Power-to-gas, seasonal
    Biomass, seasonal
    Large hot volumes (water, rock), seasonal
    Pumped hydro, weeks
    Batteries, hours
    CAES
    Flywheels in vehicles

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