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"I'm not sure that there is a shortage of supply," Khalid al-Falih, the energy minister of the world's largest oil exporter and exporter, told Reuters. Saudi Arabia, the world's largest oil producer of OPEC. Supply disruptions may have tilted the market towards the deficit.
Al-Falih was quick to point out that stocks continued to rise, especially in the United States.
Almost at the same time, the International Energy Agency (IEA) announced that the global oil market had an estimated surplus of 700,000 barrels per day in the first quarter of 2019.
Since the end of the first quarter, a number of supply problems have emerged: the United States has put an end to any derogation for oil exports from Iran, Venezuela's production continued to plummet into a prolonged political stalemate and a raging economic crisis, and Russia's oil exports had decreased due to contamination at a 1.4 million bpd pipeline to Europe.
Is the oil market rare? This is the question that analysts, investors, OPEC and its allies are trying to answer.
However, the answer is not as simple as the sum of the global supply – it depends on the type of oil. There is a shortage of heavy and medium oil and an overabundance of light oil supply.
Although the total number of barrels equilibrium could be considered as an increased number of light barrels compensating for a shortage of heavy oil, this estimate would not be correct because refineries designed to process the heavier and acidic crude would not work. with lighter qualities.
Compared to the same period last year, total global oil supply was up in April this year, 280,000 bpd higher than April of last year, according to Energy Intelligence Group and Bloomberg, presented by oil strategist Julian Lee for Bloomberg.
However, compared to the end of 2018, total supply decreased by 2 million bpd, solely because of the decline in the supply of heavy and medium fuel oil. Related: The consequences of falling interest rates for energy investors
In April 2019 compared to April 2018, the supply of light fuel oil jumped by 1.85 million bpd – mainly due to soaring oil production in the United States. Theoretically, this increase in the supply of light fuel oil offset a 900,000 bpd drop in the average fuel oil supply and a 670,000 bpd drop in the supply of heavy fuel oil, these declines being due to the fall of Venezuelan production and the sanctions imposed by the United States, to the decline of Iranian exports and the cuts of OPEC – where the producers refuse medium and heavy ranks of the market.
However, since the end of 2018, the supply of light oil has not been able to offset the decline in the supply of heavy and medium crude oil. According to Bloomberg and Energy Intelligence Group, light fuel oil supplies increased only 160,000 barrels per day compared to December 2018, while the average crude supply was down 1.52 million. barrels a day and heavy oil 640,000 barrels a day since the end of last year.
The answer to whether there is a shortage or not depends on who you are talking to. Consumers of light oil would say there is an overabundance, while heavy and light truck buyers say the market is tense and is about to become tense.
"[T]The OPEC + agreement, US sanctions against Iran and Venezuela and Alberta's production cuts have significantly tightened supplies of heavy crude oil. Compared with November, the supply of these grades has fallen by nearly 3 Mb / d, "said the IEA in its report on the May 15 oil market, which is expected to that the moderately heavy offer suffers another blow in the coming months with the end of all waivers granted to Iran. .
US refiners are facing a shortage of heavy oil as they increase their gasoline production for the driving season, analysts told Bloomberg last week. US refinery refining margins on the Gulf Coast are at their 2011 low, while limited Canadian oil reserves could result in lower refinery processing rates in the Midwest than in the US. summer 2018. Related: the downtrend is construction for oil
US refiners are also expected to pay more for the strong and acid Maya grade of Mexico after US President Donald Trump has imposed tariffs on all imports from Mexico in an attempt to solve the problem. ;illegal immigration.
"With Maya's current price around $ 63 a barrel, a 5% rate will increase the price by more than $ 3 a barrel," ESAI Energy analyst firm said Friday in a market alert.
"That's more than just shipping costs in Asia, which means that Mexico would sell barrels to Asian buyers, especially China and India, rather than pay for themselves the cost of tariffs. US refiners are likely to pay because of the lack of heavy crude, but otherwise, China and India will benefit, "notes ESAI Energy.
By Tsvetana Paraskova for Oilprice.com
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