Libya Setback and OPEC Progress
Do you remember on Friday when traders were saying that they were selling oil because of the impending resumption of Libyan oil exports? They were saying this despite that fact that Libyan Gen. Khalifa Hifter had taken control of Libya major oil ports from the U.N. brokered Libyan government.
Well, those hopes were dashed after fighting broke out. Oil tankers have had to leave the Libyan oil ports empty as heavy fighting has broken out in the oil ports. The UN backed government has failed at this point to take back key ports so the resumption of Libyan oil exports is now not likely anytime soon.
OPEC and non-OPEC nations seem like they are headed towards some type of deal to freeze oil output. Russia and Saudi Arabia are in favor of a deal. Iran was the wild card but a report that Iranian President Rhouhani favors a deal to bring “price stability” is a strong sign that Iran will be onboard.
Venezuelan President Nicolas Maduro also has said that a deal could be announced this month. While some say we won’t get a final deal in Algiers in September, OPEC Secretary Barkindo said they could call special OPEC meeting next month.
Oil rigs increased by 2 last week but gas rigs fell by 3. Crude oil rigs are now at to 416 and natural gas rigs at only 89. Miscellaneous rigs also were down 1 to 1 overall. Natural gas could start to see production drop and reduced rigs. This comes as heat demand lingers. Plus we have top keep an eye on the Atlantic that is very active from a storm perspective.
The fall out from the Colonial Pipeline continues! Gas lines and shortages plague some East Coast states as gas prices are up on average 16 cents in Georgia and 10 cents in Tennessee week over week according to AAA. The Colonial Pipeline transported 1.3 million barrels a day of fuel to the East Coast and it is causing the problem, but the Colonial Pipeline is not the only issue driving gas prices. Dow Jones reports that the BP Whiting, Indiana refinery plans to begin repair work next week on the largest of three crude-distillation units.