Prices and production
After rising by nearly $10 a barrel in the last 4 weeks, oil has been steady at around $53 a barrel for the last three days. Even a 500-point jump in the Dow on Monday and a bearish US stocks report on Wednesday failed to move prices significantly. The US crude inventory rose by 3.3 million barrels last week to 356 million, the highest level since 1993.
The stockpile increase was largely due to increased imports as US oil consumption rose slightly to 19.2 million b/d, still down 3.2 percent from last year. US gasoline demand is still being reported as up by less than a percent over last year.
Japanese commercial exports in February were down by 49 percent as compared to last year. Exports to the US were down by 58 percent and to China by 40 percent. The sluggish economy and warmer weather resulted in a 14 percent year-over-year drop in Japanese oil imports to 4.25 million b/d. Tokyo’s LNG imports for the month were down 9.5 percent.
Shipments of oil aboard Very Large Crude Carriers out of the Persian Gulf touched a five-year low in March. Shipping rates for crude leaving the Gulf are at a four-year low.
The situation in the Niger Delta continues to deteriorate. Shell is now reported as producing only 300,000 b/d from onshore fields, and total Nigerian production is said to be 1.6 million b/d.
Moscow released a forecast that its production in 2009 will be 9.6 million b/d, a drop of 1.1 percent from last year. A recent survey of outside analysts shows that as a group they expect a much larger drop. The most pessimistic assessment puts Russia’s 2009 output at 9.1 million b/d, a drop of 7 percent.
Venezuela
President Chavez continues to have troubles. He has increased the value-added tax from 9 to 12 percent; cut the national budget by 6.7 percent; and will triple the national debt. He ruled out devaluing the bolivar and increasing the price of gasoline from the current 17 cents a gallon.
PdVSA is still having trouble paying its foreign oil service contractors. Although some payments are now being made, so far they are said to total only 1 to 7 percent of the $1 billion that is owed. The contractors are still threatening to stop drilling and the government is still threatening to seize the rigs. While it’s not clear how this will eventually play out, it’s reasonable to assume that these lagging payments to contractors will reduce PdVSA’s production going forward
