Wednesday, September 3, 2008
Gustav Came And Went
After massive offloading by speculators on Wall Street, Gustav came and went without hiking up crude oil price. Oil was below US109 per barrel on Wednesday. Wall Street is still trying to convince the general public that speculation on futures and commodities is not the number 1 culprit for the high oil price. It is supply and demand. There is no supply disruption aside from the small supply closure from the Gulf of Mexico (GOM). Contrary to Wall Street, Iran OPEC Governor has announced that OPEC will reduce supply by 1M barrels per day, stating that the market is "oversupplied". Do you trust the American Wall Street sharks or the gung-ho Persians?
The personnel onboard 100 rigs operating in GOM, after lessons learnt from Katrina, were safely evacuated with all wells secured with 1.3Mbpd production. 13 refineries were shut down.
Meanwhile, Exxon is expected to increase production from Sakhalin-1 in Russia (the world's second biggest oil exporter) to 183kpbd. Oil firms are claiming that high taxation in Russia is dampening future prospects in Sakhalin.
Nigeria has been crowned the biggest producer in Africa at 1.92M barrels per day, dropping Angola to second spot.
For those working in South China Sea worried about piracy and hijacking, it is good to know that the Navy finally deployed one warship to Yemen to "monitor the situation", 2 weeks after the seizure of the first MISC tanker. A second tanker was hijacked 10 days after that.
Talk about immediate response time to national security.