Energy
Disruptions Cut 3.6 Million Barrels a Day from May Oil Supply
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The massive wildfire in Canada, militant attacks on oil facilities in Nigeria, political strife in Libya and power outages complicated by bad weather in Iraq cut an average of 3.6 million barrels of oil a day from the global crude supply in May.
The U.S. Energy Information Administration (EIA) reported the data Thursday morning and noted that May’s unplanned disruptions were the largest since the agency began tracking the date in 2011.
The wildfire in Canada’s oil sands region knocked an average of 800,000 barrels a day out of production, with a peak disruption of 1.1 million barrels. Production began coming back online earlier this month.
Nigerian production also averaged a drop of 800,000 barrels a day in May as militant attacks increased on oil and natural gas facilities. Production from the country fell to its lowest level since the 1980s, according to the EIA. The worse news is the agency expects Nigerian disruptions to “remain relatively high” through 2017.
Libya and Iraq each contributed 50,000 barrels a day of unplanned disruptions in May, and continuing production disruptions in Yemen, South Sudan, Colombia and elsewhere contributed the rest.
Virtually all unplanned disruptions are temporary, but the length of the temporary disruption varies. When the supply declines due to bad weather, natural disaster, labor strikes, technical failure or accident, the disruption normally lasts a few weeks to a few months. Supply disruptions related to political disputes or conflicts can last for years.
Global production for 2016 is currently estimated at 96.23 million barrels a day, up 490,000 barrels a day compared with 2015 and nearly 3 million barrels a day compared with 2014. The EIA now estimates global consumption of 95.26 million barrels a day in 2016, up from 93.81 in 2015 and 92.41 in 2014.
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