GLOBAL OFFSHORE UPDATE

After the worst week for oil since January, crude prices firmed up on Monday ahead of Tuesday’s historic election. Oil dropped 10 percent last week, in large part due to lowering expectations that OPEC could succeed in working out a production cut at the end of the month and also because the EIA reported a record high build up in oil inventories. Oil dropped below $45 per barrel, hitting nearly two-month lows. Of course, the elephant in the room is the U.S. presidential election. While not directly related to oil prices, the financial markets have been reacting in dramatic fashion to recent movements in the polls. And as Bloomberg reports, they have a clear preference for who they want to win: Hillary Clinton. The former Secretary of State is seen as a known quantity, while Donald Trump as a wildcard. When Trump moved up in the polls global stock markets dipped, and the markets gained as Clinton’s fortunes improved. The dynamic played out again on Monday when the FBI cleared C...

Royal Dutch Shell, the world’s second-biggest oil company by market value, thinks demand for oil could peak in as little as five years. “We’ve long been of the opinion that demand will peak before supply,” CFO Simon Henry said on a conference call on Tuesday. “And that peak may be somewhere between 5 and 15 years hence, and it will be driven by efficiency and substitution, more than offsetting the new demand for transport.” If renewable energy and other disruptive technologies, such as electric cars, continue their rapid advance, petroleum use will peak in 2030, the World Energy Council has forecast. Michael Liebreich, founder of Bloomberg New Energy Finance, predicts a peak in 2025 and decline in the 2030s. “For the first time, oil companies have to think seriously about the future,” Alastair Syme, an oil analyst at Citigroup in London, said by phone. Drillers that even a couple of years ago believed “every molecule of oil we produce will have a market,” have come to realize ...

The new OPEC Monthly Oil Market Report is out with crude only production numbers for August 2016. All charts are through August 2016. OPEC crude only production reached 33,237,000 barrels per day in August. This includes Gabon. Algeria is in slow decline. Angola seems to be holding steady. Ecuador was sharply down in August but seems to be holding steady for the last two years. Gabon has been added to OPEC but their production is so low it will have little effect one way or the other. Iran’s increase since sanctions were lifted has slowed to a crawl. There are other problems on the horizon for Iran. They are talking about changing all their oil field contracts to “buy back” contracts. That is they want the option to nationalize all everything. This will likely cause a mass exodus of foreign oil companies from Iran and hit their production considerably. Kuwait has recovered from the problems they had in April. I expect their production ...