14
Sep

Wrap – Week Ended 09/13/19

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The Blotter is updated.

The ZEB Positions page has been reorganized, please take a look.

Questions and comments under The Wrap will be addressed in the Monday post.

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19 Responses to “Wrap – Week Ended 09/13/19”

  1. 1
    zman Says:

    Houthi drones successfully struck Saudi oil infrastructure deep within the country on a scale not seen before.

    https://twitter.com/AlArabiya_Eng/status/1172812644358742017

    https://www.bbc.com/news/world-middle-east-49699429?ns_mchannel=social&ns_campaign=bbc_breaking&ns_linkname=news_central&ns_source=twitter

  2. 2
    Baylor Says:

    Headline: HALF of Saudi prodiction shut down

  3. 3
    zman Says:

    re 2 – yep, down by 5 mm bopd. As per 1, never on this scale before.

    https://www.bbc.com/news/world-middle-east-49703143?ocid=socialflow_twitter

  4. 4
    zman Says:

    Good day to fill up the old internal combustion powered auto.

  5. 5
    sea bull Says:

    Is this event more likely to be repeated now that these drones are dialed in to that facility, or was this just blind luck?

  6. 6
    zman Says:

    re 5 – pretty sophisticated strike, you’d have thought iron dome protection would have prevented it, with GPS doubtful it was luck. Also, there are photos being circulated showing bits of what look like cruise missiles. Iran has the Hoveyzeh which from Yemen could easily reach this area. Have they given it to Houthis in Yemen? Dunno. Either, this was no small, low tech hit.

    I’m guessing the response is going to be massive. Questions are what gets hit, how hard, and who else might get involved?

  7. 7
    zman Says:

    Adding to 6 – unveiled earlier this year.

  8. 8
    zman Says:

    and these are the photos going around today (no way to verify). Looks like it.

    https://twitter.com/MbKS15/status/1172888561730936832/photo/2

  9. 9
    sea bull Says:

    re 6, if so, then this has legs.

  10. 10
    zman Says:

    re 9 – clearly the ME risk premium as of Friday’s close was way too low.

  11. 11
    james T Says:

    Some specifics on damage from Alexander Stahel
    Here are some specifics on damage. Now desulfurization units that I worked with use hydrogen. Hydrogen can catch fire with the smallest of energy such as friction. Looks like the rogues had insider information so that they can hit the targets precisely.

    Exxon had damaged the depropanizer totally in a fire and that will take more than 3 months to rebuild.

    Saudi crude contains H2S & must be processed to make it fit for transport through pipelines or processing in refineries. EA understands that at least 1 of 7 stabilisation trains at Abqaiq has been severely damaged while 8-10 of the 18 desulphurisation towers are out of action

  12. 12
    zman Says:

    re 11 – thanks

    early trading up $5+ WTI, $6+ Brent

    US says SPR stands ready (as it always does).

  13. 13
    brodway Says:

    an event driven rise in oil prices. it was only a matter of time before it happened. complacent short shellers may start to look for other sectors and that alone should create significant rise in equity prices

  14. 14
    zman Says:

    re 13 – I’d expect pop and then drop action in the morning for the very short term, not dropping below the Friday closes, just PT, some trapped long selling, some fear of piling in but for prices to embrace more of a risk premium than in the past.

  15. 15
    Paul in Kansas City Says:

    I think its worth unloading OAS into the open MOnday if there is a lot of reflexive buying/short covering.

  16. 16
    zman Says:

    re 15 – that is definitely on my list of things to think about. May not happen tomorrow and that could be wrong but yep.

  17. 17
    Baylor Says:

    Will be interesting to see what this does to NG prices. Up 6 cents at the open today

  18. 18
    zman Says:

    re 17 – NGLs should move on it as well, OPEC is a large NGL producer (though OPEC doesn’t break them out by country and Saudi is not the biggest).

    Goldman out guessing at price ranges for given terms of outage.

    They see a 4 month outage as driving $75 oil and a large shale production response. This is probably not likely both from the length and from the response.

  19. 19
    Baylor Says:

    I may short UGAZ heavy tomorrow

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