THE MONTH IN BRIEF: Crude oil falls, so does Libyan production, and Iran plans to raise exports
| Date | 01 June 2015 |
| DOI | http://doi.org/10.1111/oet.12255 |
| Published date | 01 June 2015 |
THE MONTH IN BRIEF
is section summarizes downstream developments of the previous month. Exploration & Production are covered in
“Upstream Review.”
Crude oil falls, so does Libyan production, and Iran plans to raise exports
Crude oil prices began the month relatively strong and
continued to rise. Prompt Brent futures traded briey
at $69.63/bbl on May 6–up more than $3 from the
start of the month– aer Saudi Aramco increased its
contract prices for t he following month. West Texas
Intermediate (WTI), meanwhile, went above $60 for the
rst time this year. e rally soon zzled out, however, as
key economic data across the OECD suggested that oil
demand remained weak in the industrialized countries.
A second rally in the middle of the month pushed Brent
back up to nearly $67/bbl, before reality set in and prices
fell to just above $62. Canadian crude prices bucked the
trend, however, when a series of wild res in Alberta
forced a number of produc ers to shut-in produc tion,
cutting supplies to reners.
Unrest in Libya continued to aect oil production,
reducing it to 400,000 bpd: the lowest for a year. e
Chairman of Libya’s National Oil Company (NOC) said
that the country could be producing 2.1mn bpd were it
notfortheviolenceaectingmuchoftheoilindustry.
Figures issued by the Syrian government showed that
the civil war there had reduced oil production from
areas controlled by the government to 9,478 bpd during
the rst quarter of 2015, compared with 385,000bpd
before hostilities began. First quarter gas production– at
551 mn cfd– was about half normal levels. Nigerian
oil workers went on strike for a week disrupting oil
production and the distribution of re ned products,
while Members of Parli ament refused to approve a bil l
designedtoreformNigeria’soilindustryandencourage
more foreign investment. Iraqi forces claimed to have
regained control of the country’s largest renery – the
310,000 bpd plant at Baiji– from Islamic State (IS) but
lm footage shot inside the renery showed extensive
damage to the facility.
Iran said it was planning to increase oil production
by 1 to 4 mn bpd within six months of the ending of
European Union, US and other sanctions, wit h a similar
rise in exports. Several reners in Asia were reported
to have been approached by the National Iranian Oil
Company (NIOC) to resume purchases or to increase
their existing level of oil imports from Iran.
RussiaandVenezuelaheldtalksinMoscowtodis-
cuss cooperation on boosting global crude prices and
improving energy ties between the two countries. Alge-
ria appointed Salah Khabri as Minister of Petroleum,
who indic ated that he would t ry to enlist th e cooperation
of Russia, Azerbaijan, Kazakhstan, and other non-OPEC
countries in increasing world oil prices. Indonesiasaid it
was considering rejoining OPEC, which it le in 2008,
despite now being a net importer of oil. In a surprise
announcement, Saudi Arabia’s Oil Minister, Ali Naimi,
said that hi s countr y would eventually s top consuming
fossil fuels.
Colombia’s national oil company, Ecopetrol, said it
would sell $1 bn worth of non core assets, including its
interests in electricity transmission and telecommuni-
cations. Shell sold its French liqueed petroleum gas
(LPG) business, and Vitol’s and Carlyle Group’s Varo
Energy merged with the storage and retail company
Argos to create a new rening, storage, and rened
product-retailing rm in North West Europe. e new
Varo Energy has rening assets in Germany and Switzer-
land. Indonesia said it would build four new reneries
with capacities of up to 350,000bpd, starting with one
at Bontang on Kalimantan, with a scheduled opening
date of 2020. e Energy Ministry hopes that Iran will
providesomeofthecrudeforthem.eUS’newest
renery –the rst t here for 40 years– was commissioned
in North Dakota. e 20,000 bpd Dakota Prairie unit
will process local Bakken Shale oil. Waterside Energy
has applied to build a 45,000 bpd renery at Longview,
Was h i n g to n S t ate .
© 2015 John Wiley& Sons Ltd
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