Commodities: Oil industry news on Wednesday
The attack on the Saudi Arabian oil infrastructure created additional pressure on oil prices. The drones attacked the biggest oil processing plant in the world. This incident once more highlighted that regional tensions could disrupt the oil supplies. It is essential to mention that Saudi Arabia is biggest OPEC member when it comes to exporting oil in different parts of the world.
Saudi Arabian and U.S. authorities blamed Iran and Saudi Arabia even went further and promised to present evidence. The Defense Ministry of Saudi Arabia state that it has the evidence to prove that Iranian weapons were used in the attacks. The Saudi Arabia military will address this issue at a news conference in several hours.
Any further escalation is dangerous as it might lead to military conflict in the region. Iran denied any accusations and Iranian officials said that the country is ready to defend itself in case of war.
Prince Abdulaziz bin Salman commented on the ongoing situation on Tuesday. He said that average oil production in September and October would be 9.89 million barrels per day. The daily output will reach 11 million barrels per day by the end of this month. In November, the daily production is going to reach the same level as before the attack. It means that Saudi Arabia will produce 12 million barrels per day.
Meanwhile, oil prices fell for the second day in a row. The price of Brent crude oil futures fell by 28 cents or 0.4% to $64.27 a barrel. The West Texas Intermediate (WTI) crude futures decreased by 45 cents or 0.8% to $58.89.
Brazilian oil sector
There are many oil-producing countries in the world. Some of them are OPEC members and their allies. However, there are other important producers as well other than U.S. One of them is Brazil. It is worth mentioning that the biggest country in South America has a huge potential when it comes to oil production.
As mentioned above, regional tensions in the Middle East started a long time ago. Moreover, it is hard to say when these tensions will end. In this situation, it is a good idea to look for alternative suppliers. Brazil can fulfill this role. It is important to mention that the Brazilian oil sector will play an important role in the non-OPEC oil supply growth. It will become the second biggest contributor after the U.S.
According to the report prepared by McKinsey & Company, thanks to discoveries and exploration acreage Brazil can increase oil production. The report also addressed another issue which is the daily oil production. Based on the information from this report Brazil has the capacity to increase the daily oil production by 70% to 4.4 million barrels per day in 2035.
OPEC’s Monthly Oil Market Report for September is also promising for Brazil. According to this report, annual oil production will increase by 180,000 barrels per day in 2019. In 2020, this amount would reach 290,000 barrels per day.
Oil prices fell on Wednesday. The regional tensions are running high, which affects the oil industry.
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