Factbox by S&P Global Platts

UK's Forties shutdown reverberates in oil, refining markets

European gas markets were being affected by a series of outages on Tuesday, causing price spikes and an increasingly tight supply-demand balance.

Below are some details on the current outages, which include an explosion at the key Baumgarten gas hub in Austria, the shutdown of two major UK North Sea gas field areas and an unplanned outage at Norway's giant Troll field. Markets are also being affected by delays to the return of a number ofFrench nuclear reactors.

Factbox by S&P Global Platts

European gas markets impacted by number of unplanned outages Tuesday

European gas markets were being affected by a series of outages on Tuesday, causing price spikes and an increasingly tight supply-demand balance.

Here are some details on the current outages, which include an explosion at the key Baumgarten gas hub in Austria, the shutdown of two major UK North Sea gas field areas and an unplanned outage at Norway's giant Troll field. Markets are also being affected by delays to the return of a number of French nuclear reactors.

Daily Oil Commentary

Brent closed up 1.29 last night to $64.69 and WTi closed at $57.99 up 0.63.

Brent closed up 1.29 last night to $64.69 and WTi closed at $57.99 up 0.63. Good King Wenceslas phoned Domino's for a pizza. The salesgirl asked him:- 'Do you want your usual? Deep pan, crisp and even?'. Terrible that one. So the outside factor nobody was planning on has come to light up Christmas and it comes in form of the Forties pipeline being shut down. The whole Brent structure, let alone flat price, has roofed. It's not going to take much for the bulls to jump on any piece of news with regards to supply stalling but yesterday’s reports of a crack in the pipeline is fairly significant.  Once the welders do their job though let's see if the market comes back to the levels we were trading at before this particular sorry episode. The US producers will be happy because at least this news of the Brent system has taken some of the spotlight away from them but I am surprised that the WTi/Brent has widened. I would have thought that the US producers would be quick to snap up any grumblings of force majeure being declared on deliveries of North Sea oil and look at taking that buzzword of the moment "market share" by the scruff of Santa's big red suit. I'm sure news of this will out in the next few days though but let's see. Christmas party season is in full swing and it's getting to that time where every bloke in the world knows what he wants to buy but hasn't done it yet, then goes on to Amazon on the 23rd of Dec and is fuming when they can't deliver before Christmas day. Do APi have any Christmas surprises in store? Well let's see but once again all eyes should be on anticipated US production levels. Good day to all.

Daily Oil Commentary

Brent closed up 1.20 on Friday to $63.40 and WTi closed at $57.36 up 0.67.

I hope everyone had a nice weekend. Brent closed up 1.20 on Friday to $63.40 and WTi closed at $57.36 up 0.67. Today's cracker - A French Cat, Un Deux Trois, and an English cat, One Two Three, went for a swimming race round a lake. Who won? One Two Thee, because Un Deux Trois Quatre Cinque. Excellent. We're still stuck in this $60-$65 range and it looks we could be here for quite a while. The US rig count was up again for the 3rd straight week and, as I have been harping on lately, I don't see this changing for a while. I want to talk about something more interesting and something I haven't touched on all year but perhaps is now the time - Bitcoin. Ignore it as you might but this does seem to be the new "thing". Understanding it doesn't seem to matter either but who cares when it has rallied 2095% in a year? Everyone wants bitcoin and why is it rallying? Well I don't know it well enough to give you a proper geeky answer but I think it could be simple. Since bitcoin launched the creators always said there would be a finite amount ever produced. If you put a production cap on something then the value will inevitably rise. Demand outweighs supply. OPEC have tried to adopt Bitcoin's philosophy but unfortunately they are up against various other crypto currency suppliers in the form of US shale production. But it made me think - perhaps OPEC can leverage off the Bitcoin train? Do you know that the current electricity demand of everyone mining Bitcoin's is the equivalent in Energy than Denmark need in a year? So. Why don't OPEC offer discounted fuel oil to every major Bitcoin mining nation to keep the power stations running? Bitcoin fuel spread. You hear it here first. Good day and week to all.

Daily Oil Commentary

Brent closed last night up 0.98 to $62.20 and WTi closed at $56.69 up 0.73. What has the week bought us?

Only 2 weeks until the fat bloke in a suit arrives and I'm not talking about myself. Brent closed last night up 0.98 to $62.20 and WTi closed at $56.69 up 0.73. What has the week bought us? Well, another Christmas cracker of course! Who's the bane of Santa's life? The elf and safety officer. Awesome. Anywayyy, Brent, what's happened over the last week. Well, much like everyone waking up bleary eyed after their Christmas party, crude has gone sideways. Since last week’s OPEC meeting we are down around 45c on front Brent or 0.006%. Gee, what a result. Not. Bored. But why hasn't crude reacted to what OPEC thought would bring mucho mucho Christmas cheer? Simple really - it had already priced it in. There were no surprises and if anything there is actual cause for concern. It seems as if oil production is not really dropping, the USA are filling any voids left by the caverns that OPEC are opening up (shale pun intended there). And demand is not really growing either - in fact I would actually say that it is looking a bit grim. I read an article yesterday about IMF's view on the Chinese economy. Here's a fact for you - China's debt has ballooned and is now equivalent to 234% of the country's total output, according to the IMF. I think it incredibly harsh that China is still seen as the global growth indicator. Their economy has grown exponentially year after year after year yet still everyone pins hopes that China will be there to save the day. This I fear is dangerously ignorant. With Chinese New year not far away I think demand data for the period leading up to the year of the dog will be pivotal for the crude price for 2018. Have a great weekend.

Daily Oil Commentary

Today's cracker - What do you get when you mix a Christmas tree and an iPad?

Brent closed down 1.64 last night to $61.22 and WTi closed at $55.96 down 1.66. Today's cracker - What do you get when you mix a Christmas tree and an iPad? A pineapple. I love these. Moving on- this oil market. Well a fairly brutal day for crude yesterday but one which shouldn't come as a surprise. I wrote earlier this week how I will be ignoring weekly US crude data and focusing on products and US crude production. It seems as if the market agrees with me as despite a not insignificant draw on crude the market tanked. This is down to product stocks up a total of 8.5mn bbls, refinery runs up and US production up. I think the market has finally cottoned on to the fact that even though the initial crude number may seem bullish the actual crude isn't actually going anywhere. In fact with such a large build on products even the US can't export products quick enough as (and I will say this until I am blue in the face like that Violet from Willy Wonka and the Chocolate factory) DEMAND ISN'T AS GOOD AS PEOPLE SAY. The irony is is the fact that OPEC last week gave the US producers something to actually think about. It's like getting your first Scalextric set for Christmas - you put it all together in a hurried excited manner and the first few laps you take it nice and slow then bam! the urge to go full throttle takes over and before you know it your new Scalextric car is in a heap under the sofa. The US producers will not go full throttle however, they will take their time because if they start ramping up production straight away then they will shoot themselves in the foot, flat price will come off then round that stupid merry go round we go again. In other news, keep your eye on just about every oil product structure out there. The dream of "contango" could very well soon be upon us if it's not already. Good day.

Daily Oil Commentary

Today’s cracker - Why didn't Roy Hodgson go to visit Santa at The North Pole last year?

Brent closed up 0.41 last night to $62.86 and WTi closed at $57.62 up 0.15. Today’s cracker - Why didn't Roy Hodgson go to visit Santa at The North Pole last year? He couldn't get past Iceland. Excellent. Moving on, I want to talk about hope. I have written about hope many times. This morning I woke up with hope. For some stupid reason I woke up thinking that England may just chase down a record total and level the Ashes 1-1. I let my guard down and woke up with the same excitement as my daughters will have on the morning of the 25th December. But there was no mountain bike, Barbie or handbag waiting under the tree. Just an orange, a stick and a lump of coal. And another failed England performance. Sad. You may ask why my delusional cricket hopes have got anything to do with the oil market. Well I'll tell you. Last week the market had hope. It had hope that maybe, just maybe, OPEC were going to pull something out of the bag that was going to spawn a further buying frenzy. But they didn't. They left the Cratchett household without even a sparrows egg for dinner let alone a goose. According to APi we will see a draw on crude stocks later. But being the consistent commentator I am (ha!) I shall mostly be ignoring crude stock data by EIA and focusing more on products. On that happy note gasoline stocks apparently rose by 9mn barrels and distillates 5mn. That's 14mn bbls of products in a week. 14million. 14. One Four. Let me put in to context how big 14mn bbls is. That's 580,000,000 gallons. That's 2,225,821,080 litres. That's 27,822,763 bath fulls. Or 3,918,699,084.50 pints. Now I don't care if you know nothing about the oil market and you go to the pub all day, that's a lot of beer. I don't care if you know nothing about the oil market but you have a relaxing bath with stupid scented candles, that's a lot of bubble bath needed. Am I making myself clear? Increased demand? Whatever 

Daily Oil Commentary

Watch the WTi/Brent spread with a eye like eagle say Confucius.

Morning all. Brent closed down 1.28 last night to $62.45 and WTi closed at $57.47 down 0.89. Watch the WTi/Brent spread with a eye like eagle say Confucius. Current trading -4.90. Based on what I was saying yesterday and just how OPEC have only succeeded in filling every single Stetson in the Permian basin with a load of Benjamin's then it should be no surprise that with more WTi priced oil in the export market that we see that spread come close to parity sooner rather than later. Today's Christmas cracker - What's green, covered in tinsel and goes ribbet ? Mistle-toad! Brilliant. I want to talk about man bags. I had a great day out at the Rugby 7's on Saturday and one of the guys was wearing a man bag. To say other members of our group "questioned" him on the bag is a very funny understatement. However let's face it, man bags are quite metro and I am actually rather fond of them. I'd much rather have a helpful bag with me where I can put my possessions safely than I would inevitably lose my wallet, keys and phone. And lipstick of course.  What has this got to do with the oil market though? Well let's say US shale oil carries a man bag and OPEC carry one of those leather briefcases that serves nothing apart from hit you in the shins on the tube ride in to work in the morning. One is "with the kids" the other "gets mocked by the kids". It seems as if the market hasn't particularly received OPEC's briefcase full of extension and compliance talk that well so far. Granted we are in the middle of the 60-65 range but I'm sure the market reaction is not the one OPEC were hoping for. Api out later. Good day.

Daily Oil Commentary

Hope everyone had a good weekend. Brent closed up 1.10 on Friday to $63.73 and WTi closed at $57.36 up 0.96.

Morning all. Hope everyone had a good weekend. Brent closed up 1.10 on Friday to $63.73 and WTi closed at $57.36 up 0.96. Today’s cracker - What's the difference between the clementine in your Christmas stocking and Donald Trump? Nothing, they're both a little orange. Another ripper. Moving on to the oil market. Well Friday seemed a little bit of a delayed reaction by the bulls in regards to the expected OPEC announcement. Perhaps the first of the Christmas grog was having its effect but nevertheless rally we did. I'm still not sure the market is convinced though by all this OPEC rhetoric though. We've woken up to a negative market on crude, the real test will be if we can get past that psychological $65 level. I'm not sure we will for a while and we'll be stuck in a range between $60 and $65. Unless of course some geopolitical factor arises, then we may go to the magical $70. I think next year we could see a slight shift in how the market reacts to certain news. It has long been known that EIA data was and is a pivotal part of the trading week as the data released was a sign of how thirsty the US is for oil being the world’s biggest importer. Now that the US is turning in to an exporter of nigh on everything apart from cheeseburgers I think the weekly set of data the market will react primarily to will be weekly US rig data. Let’s face it, it is a paradigm shift what we have witnessed from the US. They have fairly benignly shifted from net importer to net exporter and they have taken everyone, OPEC especially, by surprise. US rigs increased by 2 last week and I'm pretty sure that we will see somewhat of a surge in the rig count over the course of the next few weeks. Good day and week to all.

Daily Oil Commentary

Brent closed up 0.10 last night to $62.63 and WTi closed at $57.40 up 0.10.

Morning all and Happy Friday. Brent closed up 0.10 last night to $62.63 and WTi closed at $57.40 up 0.10. So you may or may not have heard but the Brexit discussions are still ongoing, on that note todays Christmas cracker - How will Christmas dinner be different after Brexit? No Brussels. Brilliant. Right on to important matters - OPEC. So after about a million hours deliberating over countless cups of coffee OPEC extended the cuts out until end 2018. Shock. Well no not at all really. I know why the meeting took so long as well - there must have been about 200 oil ministers in there and the poor Saudi oil minister had to read out every single one of their names! By the time he had finished he forgot what had been agreed and back they all went for another coffee. The market reacted in the way I guessed it would - flat. The extension of the cuts had already been priced in and it has woken up with the same enthusiasm as Mr Novak's translator had throughout yesterday’s meeting. Wow did you see him? That looks like someone I definitely don't want to have a pint with. The people who will be waking up with extremely sore heads this morning are the US producers. Gee did they get an early Christmas present. I bet they've all woken up this morning with a little finger in their mouth like Dr Evil from Austin Powers. It's quite simple really - OPEC have, and were always going to, thrown them a lifeline for another year. For OPEC to leverage any hope on the fact that the US will "play ball" is quite frankly incredibly naive but I don't see what other choice they had. WTI/Brent is still at a discount so the historic OPEC shorts will look further afield for the finest black stuff. Economics 101. With refining margins in Asia still healthy and everyone pinning hopes on that China and India will drive demand for the foreseeable future I think Trump Airways may be making a few more trips to Asia. I wish you all a smashing weekend.

Daily Oil Commentary

Brent closed down 0.23 last night to $63.61 and WTi closed at $57.99 down 0.12.

Morning all. Brent closed down 0.23 last night to $63.61 and WTi closed at $57.99 down 0.12. Well one day to go to the OPEC meeting and you wouldn't say that it's looking particularly promising would you? News that there will be caveats in any extension agreement have spooked the market like a Christmas Turkey when the farmer is being overly nice. Gobble Gobble. Look, this market is a fickle one and one that isn't all that clever regardless of how many articles you read about algorithms or renewed demand or whatever. It's simple - Bullish news = prices go up. Bearish news = prices go don't up as much. It was also plain for all to see that since the end of the summer all the talk was going to be about the OPEC meeting tomorrow. Various ministers have come out and said "Yeah don't worry, the cuts are going to be extended no probs" or "We are going to do everything we must to rebalance the market". Ummm. No you're not actually mate. You'll talk about it but will you ACTUALLY do anything? I have made it clear over the last 2 weeks that the market has priced in the extension of the cut already and boy have the funds bought in to it with ferocity of a hungry lion. Anything that even remotely resembles that this is not going to happen and I think we will drop to $60, then we will see a bit of a tussle, then we will drop down to $55 before you can say "Dear fellow OPEC ministers maybe we need an EGM?". EIA data is due out later and apparently there will be a build on crude stocks. Not particularly encouraging for the bulls seeing as the Thanksgiving holidays should always drive up demand. Alas not apparently. Watch the USD. Good day.

Daily Oil Commentary

Brent closed down 0.02 last night to $63.84 and WTi closed at $58.11 down 0.84.

Morning all. Brent closed down 0.02 last night to $63.84 and WTi closed at $58.11 down 0.84. So, it looks like the rally on Brent has stalled somewhat prior to the OPEC meeting on Thursday. It's annoying really as I'm not quite sure what "surprise" the market expects. I'm pretty convinced it has already priced in an extension of the cuts out to end 2018, so anything less than this will be a disappointment and potentially catastrophic for flat price. It's a bit like when you're at home and you hear a low flying helicopter flying outside your house. You rush to the window, "Quick love get the kids!". Everyone peeks out of the window at the sight of a very low flying helicopter and potential Hollywood style action. Where in fact it turns out that some idiot has stolen a loaf of bread from the local 7-11 and the fun is over when he's nabbed by the local fat bobby on a bike. That's what the build up to the OPEC meeting is like. All the talk seems to have shifted to beyond OPEC and the future of crude oil production. Not in the next 2,3 or 5 years but further out than that - the medium term. And the only words on peoples lips are either Gas or Shale production. Let me put it to you this way - the top 7 most valuable companies by market capitalization are all tech companies. Tech is the way forward no matter how much you may try to ignore it with your Nokia 3310 and weekly trips to the library. Shale oil is the future and it is being driven by innovative technology. I sense that the market in general has yielded to this reality and with it, inevitably, comes people moving away from the more traditional ways of doing things. Now don't get me wrong, I like an Artisanal bakery, a trip to a farmers market and visiting my local butcher but at the end of the day in today’s manic world it is a lot easier to just go to Tesco online and press "repeat last order". Food for thought - literally. Good day.

Daily Oil Commentary

Brent closed 0.31 up on Friday to $63.86 and WTi closed at $58.95 up 0.93.

Morning all. How was everyone's weekend? Well don't ask John B, apparently it wasn't a penalty...*secretly laughing in the corner*.  Brent closed 0.31 up on Friday to $63.86 and WTi closed at $58.95 up 0.93. That WTI/Brent spread is weakening further so keep your beady eye on that. So, the last week of November, what does that mean? Well inevitably, the Ashes has started, so another cataclysmic failure by England at The Gabba "It was a close contest guv honestly, we only lost by ten wickets". Hmmmm. End November also means you should really either have everything purchased for Christmas or AT LEAST have a sound list and appropriate shops planned in order to avail these gifts. Unless of course, you're a man, then the 24th Dec is the only day of the year that you go shopping. Plenty of time lads. But the end of November really only means one thing - yep, in the words of Ultravox - OH, Vienna. Honestly though it really does mean nothing to me, and nor should it to you either. But, sadly, the market will not ignore this titanic meeting of the world’s oil superpowers when OPEC converge on Thursday. It's all so easy to predict really isn't it? But is it? The thing about the OPEC meeting is that it's like the annual Christmas John Lewis advert. You wait for the majority of the year for this heart-warming seasonal event and when it comes round you say "well that's not as good as last year". The you watch it again, and again, and again and the next thing you know your house is full of this year’s latest novelty fluffy toy that appears in the John Lewis Christmas advert. Genius marketing. And that's what the OPEC meeting does to you. Everyone crowds round a screen, then the meeting is over with nothing really said, everyone is annoyed. Then, a couple of hours later, everyone's reads the transcripts and starts to find all kind of exciting prospects about the future! OPEC I shall mostly be naming you in the honour of this year’s John Lewis Christmas advert #MoxTheMonster. Good day and week to all.

Daily Oil Commentary

Brent closed up 0.23 last night to $63.55. No change on WTi as the US were too busy stuffing their faces with the world most attractive looking creature, the Turkey.

Morning all. Brent closed up 0.23 last night to $63.55. No change on WTi as the US were too busy stuffing their faces with the world most attractive looking creature, the Turkey. Crude has another pretty good week, up 2.19 per bbl or 3.5%. I've got a bug to bear this morning. So I was out last night in a nice trendy bar. I wanted to use the wifi so I mouthed to the attendant "wifi password pls" whilst simulatenously pointing a finger in the air, (apparently pointing a figure in the air is the universal symbol for wifi, in the same way as waving a horizontal line in the air means "check please"). She replied "oh just log in using your facebook or instagram". This was a moment in my life I knew I was no longer "with the kids". I'm not on facebook or instachat or whatever it's called. So i was left with 2 bars of questionable mobile service whilst everyone else was downloading the latest series of Glee. Brutal. What has this got to do with the oil market? Well, I cracked up lasughing this morning when I read this "“We used to have a WhatsApp group for all ministers and delegates from the Gulf. It used to be a very busy chat room. Now it’s dead,” ha!! CAN YOU IMAGINE THE EMOJI'S!!!!! Honestly I bet it's hilarious. I reckon it's like this - Iraq minister "morning all!! :) :) $$$ hehehe". Then Kuwait reply "*whisperquietly*I think the cuts are working...shhhhhh :) #nobodyknowssabout US shale". Honestly I could go on for hours for how much fun the thougth of this chatroom would give me but I'm professional. So I won't. "Saudi minister #letstelleveryonewewillalwayscut #opec #thanksputin. OK that's enough. Crying. Good weekend. 

Daily Oil Commentary

Brent closed last night at $63.32 up 0.75 and WTi closed up 1.19 to $58.02. To all our friends in the USA, Happy Thanksgiving.

Morning all. Brent closed last night at $63.32 up 0.75 and WTi closed up 1.19 to $58.02. To all our friends in the USA, Happy Thanksgiving. To all our Australian friends (colleagues excluded), COME ON ENGLAND!! Anywayyyyy, EIA data stoked some more buying interest in to the bulls and up up up we went. The bull march seems relentless and it wouldn't surprise me if some lunatic was to bid the market up to $70 on Brent before next week’s OPEC meeting. I read yesterday that "The saudi's are going for an extension of the cuts for another 9 months". Gee thanks Sherlock. Of course they are! In fact I'm pretty sure it's already agreed but headlines like this are required just to push flat price further up for even the most naive traders. Let me explain why I'm so sceptical about the extension of the cuts. I read a brilliant article yesterday - according to many experts across the pond, the US no longer needs military might to secure oil. They are not at the mercy of an OPEC oil embargo and the consumer in the US will never have to go through shortages at the pump like they did in 1973. The US will, without question of doubt, be the biggest oil producer in the world in the next 5 years. They are producing 4 times as much at half the cost than they were just 2 years ago. The investment in technology has meant that fracking allows even the smallest of Texan producers to explore an oil well not vertically, but horizontally, meaning more can be extracted, which in turn lowers costs. Shale oil in the US is only a decade old. JP Morgan predict that shale oil production will grow by 7mn bpd between now and 2025. 7 million! 7 million barrels per chuffing day!! That will take them to between 10 – 16mn bpd. 50pct more than anyone else globally. Now look, I don't care what will you have to cut production to "rebalance the market", the facts above can no longer be ignored. But the market is ignoring these facts. Ignore them yourselves at your peril. Good day.

Daily Oil Commentary

Brent closed up 0.35 last night to $62.57 and WTi closed at $56.83 up 0.77.

Brent closed up 0.35 last night to $62.57 and WTi closed at $56.83 up 0.77. Johnny Carson once argued that Thanksgiving is so emotional because "people travel thousands of miles to be with people they only see once a year—and then discover once a year is way too often." Now, I don't celebrate Thanksgiving but I can certainly relate to this. I've only been out of the office for 2 days and I've realised that looking at this stupid market again after only 2 days is still far too soon. I can only assume that everyone is waiting for next week’s OPEC meeting. The market has dismissed any of the bearish stories that were coming from the one agency that people listen to, the IEA like a leftover Turkey sandwich. But like leftover Turkey, there is still plenty to more go around, so as much as you try and resist Turkey curry it 100pct will be on the menu as much as US crude oil will be. Yes there is some news that there is some supply disruption from Canada but I'm sorry HOW is the market reacting that this is bullish? When US production climbed by over 1mnbpd over the last year the bloomin' market didn't exactly get sold off did it!!?? Plus in today’s world of "Save the Whale", it's clear that there doesn't seem to be much of a few future for exploring for barrels that are pollutant heavy. Seeing that the majority of Canada's oil is from oil sands it doesn't take a gastroenterologist to work out that this is actually ISN'T bullish news. Stupid market. EIA data out later and according to APi we should see a sizeable draw on US crude stocks. Let's wait and see. Good day.