US oil begins supply fightback after Hurricane Delta passes through key regions
Hurricane Delta’s impact on US oil output continues.
Much of the US’ on and offshore production and refining capability lies in the hurricane’s path.
Prior to Delta’s landfall on October 8th, 90% of offshore production was closed. 800,000 of 2.4 million b/pd refinery capacity was shuttered too.
The focus is now on reopening such facilities, alongside maritime export hubs along the Texas-Louisiana border.
Slipping European demand for US crude
Even as export ports come back online, they may have to find new final destinations.
While China remains an enthusiastic buyer of US crude, Europe is less enthusiastic.
S&P Global Platts analysis suggests that European consumers are turning away from US-grades, preferring more locally sourced oil.
On October 2nd, US exports had slipped to 2.66 million b/pd, according to the US Energy Information Administration. As well as slowing European demand, falling yields on overseas fields are forecast to provoke further export slippage.
Norwegian & Libyan production blockages overcome
Price concerns have also been raised following on from developments in Norway and Libya.
On the Norwegian front, a successful conclusion of a production-disrupting strike has resulted in the reopening of its largest oil field once again. This brings 8% of Norwegian output back online.
Meanwhile, Libya is pushing ahead at production at Sahara, the nation’s largest oilfield.
Despite this, the current outlook for US oil stocks is bullish, holding at around $40.20 – $40.35 per barrel as of lunchtime October 13th.