Daily Energy Report
Egypt’s low oil inventory supports oil prices, Russia cuts output, Houthis threaten Saudis, Climate hysteria at Bloomberg, Russia attacks Ukraine gas, Japan/US hydrogen/ammonia, and more.
Chart of the Day: Oil Inventories at Sidi Kerir, Egypt, are at Record Low for this Time of Year
Summary
Figure (1) above shows trends in crude oil inventories at Sidi Kerir, Egypt. It shows that inventories declined to a record low for this time of the year (older data are not shown).
EOA’s Main Takeaway
Such a low level supports oil prices. We would like to remind our readers that VLCC, laden with more than 2 mb, cannot pass through the Suze Canal because of the width of the tanker. They unload some of their oil at Ain Sukhna in Egypt at the southern mouth of the Suez Canal as they travel north. The unloaded oil will go through the SUMED pipeline to Sidi Kerir on the Mediterranean Sea where tankers can pick up the cargo or it will be shipped in smaller tankers around the world (See Figure (2).
It seems that the Houthi attacks on ships and tankers in the Red Sea, higher cost and insurance have affected shipments and lowered inventories at Sidi Kerir to this level.
In case you are wondering who is going to be affected by the dearth of oil at Sidi Kerir, see Figure 93 below.
Story of the Day
Argus: Productivity gains sustain US shale output growth
Summary
The idea is no longer new: improving drilling techniques leads to higher production with less rigs and lower costs:
“Drilling longer horizontal wells is enabling shale oil firms to produce more oil while employing fewer rigs and completion crews” Argus states in its story.
Since most of the growth in recent years were in the Permian, notice that the oil-directed rig count in Figure (4) declined for months, yet production continued to increase.
