The August blip/trough explained

OK, here’s the apparent reason for Russia’s daily oil output inching down by 2%+ this month from the average July rate. Actually, the shortfall has lately narrowed a little to about 30,000 tons per day or 220,000 bpd, less than 2% down from July. Prime, a Russian news agency, quotes Rosneft’s head of E&P saying some of the Sakhalin infrastructure has to be shut down for much of the month, apparently for planned maintenance. (Also see the transcript at Seeking Alpha. Registration required, or try Google cache.) That’s common practice globally, if not so much in Russia. and generally not a cause for concern. Sakhalin-1 produced at 170,000 bpd last year according to ExxonMobil, its operator, so assuming the same rate in 2016 and a 100% shutdown, it would account for most of the shortfall. The rest could be due to Rosneft’s own offshore output from Sakhalin, at about 50,000 bpd in January-June, going offline. No big deal here, no trend-breaker, business as usual.

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