oil over the horizon
Re: oil over the horizon
At the top of that article, note the big gap between West Texas Intermediate (WTI) and Louisiana Light Sweet (LLS). Find the companies that sell their oil under marketing agreements tied to LLS.
LLS competes directly with "seaborne oil", so it sells close to Brent.
The "Tariff War" with China has gone on too long. It sure seems like educated people should be able to sit down and hash out differences for a fair trade agreement. Here's an idea: Make a list of the issues and tell China to agree to half of what we want. Let them pick the ones. If there is one we must have (like quit stealing our patented ideas) then tell them that must be on the list.
On a scale of 1-10, my faith in Washington DC is now below 1 and my faith in the Chinese honoring any agreement on paper is less than that.
The world is not coming to an end. My bet is that we can adapt to "life without stuff from China" if we have to. EIA lowering their oil demand growth forecast from 1.4 to 1.2 million barrels per day, is nothing in a world that consumes over 100 million barrels per day of hydrocarbon based refined products. BTW both EIA and IEA have a long history of under-estimating demand growth for oil.
LLS competes directly with "seaborne oil", so it sells close to Brent.
The "Tariff War" with China has gone on too long. It sure seems like educated people should be able to sit down and hash out differences for a fair trade agreement. Here's an idea: Make a list of the issues and tell China to agree to half of what we want. Let them pick the ones. If there is one we must have (like quit stealing our patented ideas) then tell them that must be on the list.
On a scale of 1-10, my faith in Washington DC is now below 1 and my faith in the Chinese honoring any agreement on paper is less than that.
The world is not coming to an end. My bet is that we can adapt to "life without stuff from China" if we have to. EIA lowering their oil demand growth forecast from 1.4 to 1.2 million barrels per day, is nothing in a world that consumes over 100 million barrels per day of hydrocarbon based refined products. BTW both EIA and IEA have a long history of under-estimating demand growth for oil.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: oil over the horizon
Martijn Rats, CFA – Morgan Stanley (based in London)
June 12, 2019 9:27 AM GMT
Our global oil demand tracker monitors monthly government data from eight
"early reporters" covering 48% of world demand and 70% of growth over the
past few years. Data is collected for the US, China, India, South Korea, Brazil,
Japan, Thailand and Australia. The group's demand has a 91% correlation with
reported global demand from the IEA.
As we highlighted in Could Oil Demand Be Much Weaker Than We Think?,
demand for the group was up by just 0.4 mb/d YoY in April. This implies global
growth of 1 mb/d, well below the trend rate of the last few years. This followed
March data which was even weaker, with the group's demand falling by 0.4
mb/d. For March and April combined, the group had net growth of 0.
Even in 2018, demand growth was concentrated in three countries, which are
now starting to slow. China, India and the US grew by 1.4 mb/d in 2018, offset by
a 110 kb/d decline elsewhere. The US has now reported negative growth for
March and April, the first YoY decline since Sep 2017 if a small dip in January is
excluded. While China and India are still reporting positive numbers, they have
both seen their pace of demand growth slow in recent months. Combining this
with slower growth or declines elsewhere, the global picture has weakened.
Looking at the refined products, weakness in diesel and fuel oil was offset by
stronger gasoline and jet/kerosene growth,as well as "other products". Diesel
demand has been under pressure with a slew of global macro indicators rolling
over (see Global Trade Flow Monitor and Global manufacturing PMI),and
flooding in the US Midwest weighing on agricultural activity.Lower use in power
generation has weighed on fuel oil demand while gasoline demand was actually
quite robust in April and inventories continued to draw down.
Observable crude runs continued to pick up seasonally and were 720 kb/d
higher YoY in April. This continues to be led by Asia, while runs in the US have
disappointed versus 2018 levels since the start of the year. Chinese crude
imports reached a new record high of 10.6 mb/d in April, perhaps as refiners
purchased Iranian oil before waivers expired.
Our weekly inventory tracking has shown builds in total oil inventories in 9 of
the last 10 weeks, with both crude and product inventories starting to look quite
elevated. A lot of this has been in the US where refinery through put has lagged
and demand has been weaker.
June 12, 2019 9:27 AM GMT
Our global oil demand tracker monitors monthly government data from eight
"early reporters" covering 48% of world demand and 70% of growth over the
past few years. Data is collected for the US, China, India, South Korea, Brazil,
Japan, Thailand and Australia. The group's demand has a 91% correlation with
reported global demand from the IEA.
As we highlighted in Could Oil Demand Be Much Weaker Than We Think?,
demand for the group was up by just 0.4 mb/d YoY in April. This implies global
growth of 1 mb/d, well below the trend rate of the last few years. This followed
March data which was even weaker, with the group's demand falling by 0.4
mb/d. For March and April combined, the group had net growth of 0.
Even in 2018, demand growth was concentrated in three countries, which are
now starting to slow. China, India and the US grew by 1.4 mb/d in 2018, offset by
a 110 kb/d decline elsewhere. The US has now reported negative growth for
March and April, the first YoY decline since Sep 2017 if a small dip in January is
excluded. While China and India are still reporting positive numbers, they have
both seen their pace of demand growth slow in recent months. Combining this
with slower growth or declines elsewhere, the global picture has weakened.
Looking at the refined products, weakness in diesel and fuel oil was offset by
stronger gasoline and jet/kerosene growth,as well as "other products". Diesel
demand has been under pressure with a slew of global macro indicators rolling
over (see Global Trade Flow Monitor and Global manufacturing PMI),and
flooding in the US Midwest weighing on agricultural activity.Lower use in power
generation has weighed on fuel oil demand while gasoline demand was actually
quite robust in April and inventories continued to draw down.
Observable crude runs continued to pick up seasonally and were 720 kb/d
higher YoY in April. This continues to be led by Asia, while runs in the US have
disappointed versus 2018 levels since the start of the year. Chinese crude
imports reached a new record high of 10.6 mb/d in April, perhaps as refiners
purchased Iranian oil before waivers expired.
Our weekly inventory tracking has shown builds in total oil inventories in 9 of
the last 10 weeks, with both crude and product inventories starting to look quite
elevated. A lot of this has been in the US where refinery through put has lagged
and demand has been weaker.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group