THE MONTH IN BRIEF: Harvey hits Texas sending WTI slumping down, Libyan output hit again and more trouble for Nigeria
| Published date | 01 September 2017 |
| Date | 01 September 2017 |
| DOI | http://doi.org/10.1111/oet.12524 |
THE MONTH IN BRIEF
Harvey hits Texas sending WTI slumping down, Libyan output hit again
and more trouble for Nigeria
Crude oil prices remained range-bound in default of
any major market developments. Brent prompt futures
threatened tobreach the $53 mark early in the monthon
news of falling US stock levels but soon fell back, losing
$1.83 in the third week of August. A hurricane by the
name of Harvey provided some volatility at the end of
the month when it tore through Texas, shutting-in pro-
duction and rening capacity. Brent went up, although
by less than a dollar, to$52.41/bbl as Harvey made land-
fall, aer which the price subsided. e most signi-
cant development was the widening of the Brent/WTI
spread to more than $5/bbl for t he rst time in two years
as US crude exports were disrupted by the storm leav-
ing domestic crudes to pile-up amid a massive fall in
demand as more than 3 mn bp d of renery capacity went
downoutofatotalof5mnbpdontheTexasGulfCoast.
Mexico suered collateral damage as Harvey caused
US product exports to be curtailed. Pemex sought
replacement barrels from as far away as Nova Scotia.
Product prices on the US East and West Coast soared,
led by gasoline, of which Mexico was especially in
need. Some impor ters of US products in Latin America
made inquiries in Europe for material while reners
there shipped gasoline to the US East Coast to replace
normal deliveries there from the Gulf Coast. e US
Department of Commerce threatened to impose duties
on imports of biofuels from Argentina and Indonesia,
claiming their subsidies on the product constituted
unfair competition for US suppliers. US ocials met
representatives from C anada and Mexico to disc uss
trade, including energy, under the North American Free
Trade Agreement (NAFTA), which President Donald
Trump wishes to renegotiate.
Libya’s National Oil Corporation (NOC) said that
360,000 bpd of crude oil production had been shut-in
by a series of attacks on pipelines serving the Zawiya
export terminal and the al-Fil oileld. Production at the
Zawiya renery was also hit. Output in July had been
close to 1 mn bpd. Nigeria continued to suer attacks
on its oil pipelines. e latest was on a 22,000 bpd
ow-stationinRiversStateservingtheBonnyexportter-
minal. e locals responsible said that the operator,Shell,
was not investing suciently in the local community.
e government said it would oer 40% of the shares
of the proposed ne w national oil company, to be called
the National Petroleum Company (NPC). Iraq reported
an attack on the 100,000 bpd Garraf oileld. Produc-
tionwassaidtobeunaected.eKurdistanRegional
government (KRG) denounced Iraq’s plans for a pipeline
tocarrycrudeoilfromKirkuktoIranthatwouldby-pass
the KRG’s export pipeline to Turkey, which is currently
used to export oil from Kirkuk. Protesters in Colombia
attacked two heavy cr ude elds c ausing the s hutting-i n
of about 20,000 bpd.
Russia’s Rosne and a Tragura-led consortium con-
cluded a deal to buy 98.26% of India’s second-largest
private rener, Essar Oil. e $12.9 bn deal in Rus-
sia’s largest foreign investment and is part of a move
by Russia and India to increase economic ties, and
gives Rosne an important foothold in India’s rapidly
growing domestic market. China National Oshore Oil
Corporation (CNO OC) announced the i naugurat ion
of the second phase of its 200,000 bpd renery at
Huizhou. South Korea’s SK Engineering & Construc tion
signed a heads-of-agreement to upgrade Iran’s 110,000
bpd Tabriz renery. Canada is to require regulatory
bodies to consider the greenhouse gas emissions of
future oil and gas pipel ines as part of the approvals
process.
© 2017 John Wiley& Sons Ltd
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