Several reasons for the support of oil prices Nigerian Oil Output Plunges to 20-Year Low as Attacks Escalate
Nigeria is suffering a worsening bout of oil disruption that has pushed production to the lowest in 20 years, as attacks against facilities in the energy-rich but impoverished nation increase in number and audacity.
Chevron Corp. said on Friday it had shut down about 90,000 barrels a day of output following an attack on an offshore platform that serves as a gathering point for production from several fields. Even before that strike on Wednesday night, Nigerian oil production had fallen below 1.7 million barrels a day for the first time since 1994, according to data compiled by Bloomberg.
Libyan Oil Revival Less Likely as East-West Standoff Escalates
Production at the Arabian Gulf Oil Co. will halt if exports from Hariga stop for another 24 days, Omran al-Zwai, a company spokesman, said by phone on Wednesday. Output has already decreased to 90,000 barrels a day from 240,000 barrels because of storage constraints at Hariga, and the last tanker to load there was on April 28, he said.
Oil-Drilling Slump Engulfs Africa as Rout Deters Explorers
U.S. explorers aren’t the only ones idling rigs as sub-$50 crude forces oil and gas drillers in Africa to slow their search for new reserves.
“U.S. production was just starting to decline by this time last year but the critical difference is that ex-U.S. supply is now also showing tangible signs of being impacted by low prices,” Citigroup Inc. analysts wrote in a May 4 report. “This dynamic is particularly important, as unlike shale, these supply declines are much harder to reverse in the short or even medium term.”
The Party’s Over in Alaska
Thirty years ago the state was pumping 2 million barrels a day, a quarter of all U.S. output. But over the past decade, the Prudhoe Bay oil field, once the largest in North America, has started to reach the end of its life. Alaska’s output has fallen to 500,000 barrels a day, enough to fill only one-quarter of the capacity of the state’s main economic artery, the 800-mile Trans-Alaska Pipeline System.
Two-Thirds of U.S. Gas Supply Now Comes From Fracking
Hydraulic fracturing, the method used to extract oil and natural gas from shale formations deep underground, has gone from a niche activity to the process responsible for more than two-thirds of U.S. gas supply. Fracking now accounts for 67 percent of marketed gas output, up from less than 7 percent in 2000, according to the U.S. Energy Information Administration. The controversial technique involves pumping water, sand and chemicals into a well to break apart rock and release fuel.