Energy News Bulletin’s Slugcatcher, gives their input on what they look at besides oil price, to determine if the oil and gas industry will continue to recover.
First, shipping movements.
Last year, full tankers were waiting to be unloaded as the oil glut kept them waiting ports with big oil refining capacity. This indicated little chance of price recovery. These days, however, things are looking up, as the number of moored tankers has dwindled. In fact, the most recent data by Reuters shows that in Singapore last week, there were 15 fully loaded super-tankers waiting to berth at the country’s oil refineries – that’s half of what it was in June.
The world’s largest crude carrier, Seaways Laura Lynn, holds three million barrels of oil, has been docked for two years with a full load. Most recently the oil has been being drained to smaller tankers heading to refineries, giving us yet another sign of the draining glut.
Second, the state of Mid-East politics.
The mood of Middle East politics, such as the level of tension in the Persian Gulf where the world’s oil passes, can also be a gauge of where oil prices are going. As tensions rise, typically, so do oil prices. Events like hijackings can take over tankers, causing the slow movement of oil. But as tensions ebb, movement frees up.
So where does Slugcatcher think this is going? His target for Brent oil was $60/bbl, and instead of increasing it to $70, he feels confident that $80/bbl can be hit based solely on the shipping testing and the Middle East political heat.
Keep those numbers coming, Slugcatcher, we’re behind you.
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