The Situation Room: Recovering Ground After the Saudi Attacks
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The Situation Room: Recovering Ground After the Saudi Attacks

by | published September 23rd, 2019

Welcome back from the weekend, Oil & Energy Investors. Thankfully, this weekend was a bit quieter than last. At least, there were no urgent calls from the Persian Gulf reporting any more attacks. I’d call that a definite improvement.

However, the repercussions from last week’s attack on Saudi oil are still ongoing. And I will still be keeping an eye on the situation.

In the meantime, the energy world is as bustling as ever, and I’m keeping busy analyzing the markets, particularly the trends going on with oil production and the price of crude.

So, let’s get started…

1. A Saudi Recovery?

The attacks on Saudi oil last week created some concerns for the state of global oil supply.

Directly after the attack, Saudi officials stated that they would have their production up and running again by the end of the month. I am currently looking behind the scenes in this apparent Saudi production “recovery” after the drone attack.

Sources tell me the problems at Abqaiq are more substantial than reported, with a further decline in the grade of resulting crude and state oil company Aramco filling export flow from strategic reserves (for which about 32 days exist).

Simply put, we could be seeing some unexpected things coming out of the Persian Gulf. As always, I’ll keep you up to date on the goings on.

2. The Question of an IPO

In a related matter, I am beginning to estimate the negative impact of the attack on the proceeds from a minority IPO in Aramco. Riyadh continues to maintain that it will fast track the sale, but what Saudi Arabia receives from it remains dependent upon what the market sees as a valuation of Aramco.

And there, the security of the entire national oil infrastructure becomes a net negative.

How the U.S. Is Maintaining Its Oil Lead

On the oil production side of things, Saudi Arabia is far from the only country that’s been in the spotlight recently.

Longtime readers are aware that the U.S. overtook its rivals to become the world’s largest oil producer last year. In fact, we accounted for about 18% of global production in 2018.

That number is likely to increase, especially considering the new technology that’s making waves in the market.

And when I say “making waves,” I mean that literally.

Because this technology uses the Earth’s seismic waves to our advantage.

It’s helping the U.S. to find and drill an incredible amount of oil hidden at the deepest depths in offshore locations.

And the company that developed it is riding high.

Just click here to learn all about this exciting development – and how you can profit from it.

Sincerely,

Kent

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