Yet talk that cool water and wind shear could weaken the storm as it reaches land and not be nearly as strong as the previous storm Hurricane Laura, should mean the recovery after the storm hopefully will be quick.
While hopes are high that U.S. Gulf production might come back on quickly after the storm, there are concerns that Norway’s output will get shut-in due to a strike. Reuters reports that, “A strike by Norwegian oil workers could knock out almost a quarter of the country’s petroleum production by October 14, operators say, raising the prospect of further price rises on the international oil market. The price of North Sea oil (LCOc1) rose by around 1.1% to $42.46 a barrel by 0755 GMT on Thursday, Refinitiv data showed. The dispute began on September 30 when wage talks between the Lederne union and the organization representing oil companies collapsed, but the first production outages only started on October 5.
Reuters says that, “The union wants to match workers’ pay and conditions at onshore remote control rooms with those of offshore workers and have a higher increase in this year’s wage round than proposed by oil firms. Six offshore oil and gas fields shut down on Monday as Lederne ramped up its strike, cutting output capacity by 8%, or around 330,000 barrels of oil equivalent per day (boepd), the Norwegian Oil and Gas Association (NOG) said. U.S. oil major ConocoPhillips (NYSE:COP) announced on Thursday the planned shutdown on October 10 of its Ekofisk 2/4 B platform, with the output of 7,000 boepd, one of eight offshore facilities at the giant field. Another six oil and gas field could wholly or partly close by October 14, including the Ekofisk platform, the industry has said.
The Energy Information Administration (EIA) report was also supportive as gasoline demand is going up while jet fuel demand lags. U.S. oil production got back to 11 million barrels a day, but the Strategic Petroleum Reserves continue to empty as demand rises.
The EIA reported that crude oil inventories increased by 0.5 million. Gasoline stocks fell by 1.4 million barrels last week and are now at the five year average for this time of year. Gas is a problem for refiners as they have to balance the diesel glut against the rising demand for gasoline. The gasoline supply could tighten, and prices at the pump will start to rise.
Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories fell by 1.0 million barrels last week and are about 23% above the five year average for this time of year. Total commercial petroleum inventories fell by 2.0 million barrels last week.
Peak demand! Well, not just yet. OPEC I released its World Oil Outlook 2045. They predict that global oil demand to rise from 99.7mbpd in 2019 to 109.1mbpd in 2045. While that is 1 million barrels of oil a day less than their last forecast, it does not suggest that oil demand has peaked just yet. In fact, with low prices and the lack of investment, I assume that oil demand will more than exceed OPEC prediction.