Global Crude Oil Supply Outages Have Risen
Global crude oil supply outages
The EIA (U.S. Energy Information Administration) estimates that global crude oil supply outages rose by 209,000 bpd (barrels per day) to 1.9 MMbpd (million barrels per day) in August 2017—compared to July 2017. Supply outages rose 12% month-over-month but have fallen by 0.87 MMbpd, or 31.4%, year-over-year. In July 2017, supply outages rose from the April 2012 low.
Any rise in global crude oil supply outages is bullish for Brent and US crude oil (USO) (UCO) (DBO) prices. Higher crude oil prices have a positive impact on international and US oil producers (XLE) (XOP) like Shell (RDS.A), Rosneft, Chevron (CVX), SM Energy (SM), and Goodrich Petroleum (GDP).
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Highs and lows
Global crude oil supply outages hit 3.6 MMbpd in May 2016—the highest level since 2011. In contrast, supply outages hit 1.7 MMbpd in July 2017—the lowest level since April 2012.
OPEC and non-OPEC crude oil supply outages
Non-OPEC oil producers’ supply outages rose by 97,500 bpd to 0.64 MMbpd in August 2017—compared to July 2017. It’s the highest level since May 2017. The US had major supply outages among non-OPEC producers in August 2017 due to Hurricane Harvey.
Impact of a rise in global crude oil supply outages
In the next part of the series, we’ll look how China’s crude oil imports impact crude oil prices.