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Global Crude Oil Supply Outage Is near 2012 Low

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Dec. 20 2017, Updated 10:00 a.m. ET

Global crude oil supply outages

According to the EIA, global crude oil supply outages fell by 10,000 bpd (barrels per day) or 0.7% to 1,555,000 bpd in November 2017—compared to the previous month. Supply outages fell by 729,000 bpd or 32% year-over-year. The global crude oil supply outage was near a six-year low.

Any fall in global crude oil supply outages is bearish for oil (BNO) (DBO) prices. Moves in oil prices impact energy producers (FENY) (IYE) like PDC Energy (PDCE), Viper Energy (VNOM), and Cobalt International Energy (CIE).

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Global crude oil supply outages: Highs

Global oil supply outages hit 3.6 MMbpd in May 2016—the highest level since 2011. Brent crude oil (BNO) prices rose 12% in May 2016 from April 2016. On the other hand, supply outages in November 2017 were at the lowest level since January 2012. 

OPEC and non-OPEC crude oil supply outages

OPEC producers’ oil supply outages fell by 20,000 bpd to 1,205,000 bpd in November 2017—compared to the previous month. Libya, Kuwait, Iraq, Saudi Arabia, and Nigeria had supply outages among OPEC producers.

Non-OPEC oil producers’ supply outages rose by 10,000 bpd to 350,000 bpd in November 2017—compared to the previous month. Yemen and Sudan had the highest supply outages among non-OPEC producers.

Impact of global crude oil supply outages

The fall in supply outages could lead to a rise in crude oil supplies. A rise in global supplies would pressure oil (UCO) (SCO) prices. The rise in crude oil supplies from the US, Canada, and Brazil will also add to global supplies, which would pressure oil prices.

Read Which Factors Could Limit the Upside for Crude Oil Futures? and Will US Natural Gas Futures Fall More? for updates on crude oil and natural gas.

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