The latest weekly U.S. inventory data by the American Petroleum Institute released Tuesday showed that U.S. crude stockpiles dropped by 5.1 million barrels to 536.8 million, more than double the forecast fall.
Strong U.S. new homes sales also pointed to the U. S. economy being sufficiently strong to absorb a modest interest-rate hike, a factor that would underpin demand for oil.
If the EIA weekly storage report confirms this large draw we could see WTI move over $50/bbl today.
Oil Prices - May 25
Oil Prices - May 25
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices - May 25
The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 4.2 million barrels in the week ended May 20. Market analysts' expected a crude-stock decline of 2.5 million barrels, while the American Petroleum Institute late Tuesday reported a supply drop of 5.2 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 649,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 537.1 million barrels as of last week.
The report also showed that gasoline inventories increased by 2.0 million barrels, compared to expectations for a drop of 1.1 million barrels, while distillate stockpiles fell by 1.3 million barrels.
Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, fell by 649,000 barrels last week, the EIA said.
Total U.S. crude oil inventories stood at 537.1 million barrels as of last week.
The report also showed that gasoline inventories increased by 2.0 million barrels, compared to expectations for a drop of 1.1 million barrels, while distillate stockpiles fell by 1.3 million barrels.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: Oil Prices - May 25
From DNB Oil Market Update
Yesterday evening the API reported a sizeable crude oil stock draw of 5.1 million barrels. That stock draw has affected the market positively through today’s trading and already 10 minutes before the DOE stats were released the market was up almost a dollar. This was despite a reported gasoline stock build of 3.6 million barrels, also reported by the API yesterday. The past two weeks the API and the DOE has however reported quite different numbers which have not moved in the same direction. This is quite rare because normally the APIs and the DOEs move at least in the same direction.
This week was more normal as also the DOE reported a sizeable crude stock draw of 4.2 million barrels. Domestic production continued to drop, this time by 24,000 bbl per day vs the prior week. This is according to the average weekly reduction in crude output we have seen in recent months and equals an annualized decrease in output of 1.25 million b/d if it continues every week for 52 weeks. The key reason why we saw a flip from build to draw in crude stocks compared with last week was however that crude imports came down.
Gasoline stocks built 2.0 million barrels on the back of weaker demand while distillate stocks continued to draw. Total petroleum stocks drew 0.9 million barrels as the stock draw in crude and distillates more than offset the build in gasoline.
Total demand was good at 20.4 million b/d which means 4-week moving average demand growth is now 586,000 bbls per day (+3%). The initial impression was bullish due to the confirmation of the sizeable crude stock draw, but in total we would only say moderately bullish due to the build in gasoline stocks.
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1. I expect the decline in crude oil production to accelerate, thanks to the big decline in the active rig count in Q1
2. We are entering the peak demand period for gasoline.
3. IEA forecasts a 1.66 million barrel per day increase in demand for refined products from Q1 to Q3.
Yesterday evening the API reported a sizeable crude oil stock draw of 5.1 million barrels. That stock draw has affected the market positively through today’s trading and already 10 minutes before the DOE stats were released the market was up almost a dollar. This was despite a reported gasoline stock build of 3.6 million barrels, also reported by the API yesterday. The past two weeks the API and the DOE has however reported quite different numbers which have not moved in the same direction. This is quite rare because normally the APIs and the DOEs move at least in the same direction.
This week was more normal as also the DOE reported a sizeable crude stock draw of 4.2 million barrels. Domestic production continued to drop, this time by 24,000 bbl per day vs the prior week. This is according to the average weekly reduction in crude output we have seen in recent months and equals an annualized decrease in output of 1.25 million b/d if it continues every week for 52 weeks. The key reason why we saw a flip from build to draw in crude stocks compared with last week was however that crude imports came down.
Gasoline stocks built 2.0 million barrels on the back of weaker demand while distillate stocks continued to draw. Total petroleum stocks drew 0.9 million barrels as the stock draw in crude and distillates more than offset the build in gasoline.
Total demand was good at 20.4 million b/d which means 4-week moving average demand growth is now 586,000 bbls per day (+3%). The initial impression was bullish due to the confirmation of the sizeable crude stock draw, but in total we would only say moderately bullish due to the build in gasoline stocks.
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1. I expect the decline in crude oil production to accelerate, thanks to the big decline in the active rig count in Q1
2. We are entering the peak demand period for gasoline.
3. IEA forecasts a 1.66 million barrel per day increase in demand for refined products from Q1 to Q3.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group