• Supply
  • Social Media
VisitTAC - The Arnold Companies
Customer LOGIN

Unplanned Outages Of Crude Oil Globally

Tuesday, Oct 13 2020
Market Talk

There is more back and forth action for energy markets this week, leaving most contracts stuck in the sideways pattern that’s held them since June. Yesterday, easing supply concerns had energy futures moving lower, and today it appears to be demand optimism that has them trying to rally. 

surge in Chinese trade activity reported for September is giving markets around the world a boost as it sheds an optimistic light on the economic recovery from COVID, even as equity markets are taking a breather after a major vaccine trial hit a speed bump

Early reports from Lake Charles suggest that both the Citgo and P66 refineries avoided major damage from Delta, and will restart operations within the next couple of weeks. Colonial pipeline confirmed its mainlines were both back in service as of Sunday night, which means we should not see any major supply issues from this storm. 

The relative lack of movement in both futures and basis prices compared to previous years when multiple hurricanes hit refining country demonstrates how COVID-related demand destruction has created a substantial buffer for domestic fuel supply.

The IEA published its long term World Energy Outlook, highlighting several scenarios for both COVID recovery and environmental policies and how they’ll impact the supply & demand balance globally. The general theme, as with many IEA reports, is that countries around the world need to do much more to reduce emissions.

An EIA note this morning demonstrates how much worse the global glut of oil supply would be if Iran, Libya and Venezuela weren’t facing huge declines in output. Unplanned outages for crude oil production globally are at their highest level in nearly a decade, primarily due to those three countries, and combined with voluntary run cuts in, are succeeding in rebalancing the world market.   

A few notes from the IEA’s World Energy Outlook:

  • There is a disparity in many countries between the spending required for smart, digital and flexible electricity networks and the revenues available to grid operators, creating a risk to the adequacy of investment under today’s regulatory structures.

  • Rising incomes in emerging market and developing economies create strong underlying demand for mobility, offsetting reductions in oil use elsewhere. But transport fuels are no longer a reliable engine for growth.  Upward pressure on oil demand increasingly depends on its rising use as a feedstock in the petrochemical sector.

  • Not all the shifts in consumer behavior disadvantage oil. It benefits from a near-term aversion to public transport, the continued popularity of SUVs and the delayed replacement of older, inefficient vehicles.

  • The U.S. shale industry has met nearly 60% of the increase in global oil and gas demand over the last ten years, but this rise was fueled by easy credit that has now dried up. So far in 2020, leading oil and gas companies have reduced the reported worth of their assets by more than $50 billion.

  • Over the next ten years, lower emissions from urban power plants, residential heating units and industrial facilities in the SDS lead to falls of 45-65% in concentrations of fine particulate matter in cities, and cleaner transportation also brings down other street-level pollutants. 

Click here to download a PDF of today's TACenergy Market Talk.

News & ViewsMarket Talk

News & Views
Latest Posts

KTBS 3 Spotlight on TACenergy Leadership COO Fred Sloan - Sharing Thoughts on Changes in the Gas Market
Go Rentals Opens 10 New Locations with Partner, TAC Air
Tac Air's new facility features B17-G model airplane, Military Situation Room
TAC Air B-17G Model Brings Nostalgia and Tears

News & Views

Market Talk
Latest Posts

Market Talk

TACenergy logo
Sales:  800-375-FUELSupply & Logistics:  800-808-6500

Get in Touch

Sign up to receive market talk updates in your inbox each day.
Establish a credit account.
Apply For Credit
Need to make a fuel order today?

Follow us

  • Supply
  • News & Views
  • Market Talk Updates
  • Social Media
  • Contact a Representative
  • Customer Login
  • Apply For Credit
Find Your Next Great Role With TACenergy.
Explore Careers
  • Privacy Policy
  • Terms of Use
  • Employee Login
  • Sitemap
TACenergy, LLC © 2022. All Rights Reserved.