One of the world’s largest crude storage facilities in South Africa is emptying fast as demand booms and the OPEC cuts hold firm. This may be an early sign of the serious shortages and consequent price hikes forecast only two months ago by the Aramco chief. In July 2017, he described the outlook for oil supplies as ‘extremely worrying’ and argued that the transition to alternative fuels will be too slow to prevent massive shortages and a price boom.
As Scotland can increasingly rely on it renewables, this is good news for the sales of North Sea and West of Shetland oil. Unfortunately, it’s coming too early for a Scottish Treasury to reap the benefits.
According to Energy Voice today:
‘Crude demand is now seasonally outstripping supply, tightening the physical market for some crude varieties to levels not seen in the last two years and encouraging traders to sell their stored oil.’
Another clear sign is the further increase in Brent prices for crude in November, up to $56.14 per barrel from $54.29.
Bear in mind the BP chief’s admission that it costs only $15pb to extract the oil. See: