Keep an eye on the refiners

[dan_s]

Phil Flynn: "Refiners last week showed the first sign that they were coming out of spring maintenance and the race will be on to catch up with the summer blends of gasoline. The market will focus on gas and oil as we await tonight’s American Petroleum Institute (API) supply report."

If IEA is anywhere close to right that refiners are going to draw 1.9 million barrels per day more crude oil from inventory in Q2 than they did in Q1 then we in for a very bullish period for oil prices. Keep a close eye on the refinery utilization rate. It should be moving over 90% soon.

[dan_s]

Phil Flynn: "Crude supply will also be closely watched as U.S. inventories stay stubbornly high. One week it is the last gasp of OPEC production supply before the historic cut in production. Another week it is the expectation of more supply from the Strategic Petroleum Reserves and last week it was a flood of Canadian oil imports and of course a consistent increase in shale production. But as I have warned before, the record supply in U.S. oil is taking the market focus off the big picture, which is a path to a under supplied market, by the middle of the year. With the high likelihood of an extension of OPEC production cuts and falling output in Asia, the market will go into a deficit globally."

[dan_s]

Overnight Libya's oil output went down 252,000 bpd after a shutdown at Sharara, a source at the National Oil Corporation (NOC) said on Tuesday according to Reuters.

[dan_s]

Confirmed: "Libya oil production cut by 252,000 bpd. Production at Libyan oil fields fell by 252,000 bpd this week because armed factions forced the shutdown of a few oil fields. Libya’s output continues to seesaw amid political deadlock and war between rival factions."