Oil Price - Dec 20
Posted: Wed Dec 20, 2017 2:52 pm
Phil Flynn's take on today's EIA report at 11:40 AM ET
Roll out the barrels; raise up production before supply falls again. Fill up the tankers, I may be rushing things, but supply is down again now. For we need a little oil, right this very minute, refiners have a window, no matter how bears spin it. And we also need distillate, right this very minute. It hasn't snowed a single flurry, but refiners have to be in a hurry. So producers get busy, build up the production to highs we have never seen. Raise up the out take. It's time to get ready for new tax cut demand now! Supply has grown a little leaner, and its going to get colder, refiners get cracking, it’s time to get bolder. We need a little oil now.
The American Petroleum Institute (API) reported another massive drawdown in U.S. crude supply coming at a drop of 5.222 million barrels last week. That is the third big draw in a row and was almost twice what the market was looking for. The drops add to what has been one of the biggest peak to valley drops in U.S. crude supply and is reflective not only of the success of OPEC production cuts but also evidence that Shale oil producers can’t keep pace with the OPEC production cuts and record compliance.
EIA estimated a decline in U.S. crude oil inventories of 6,495,000 barrels when their report came out this morning.
While the market is showing more concern about the tightening global oil supply situation, and rising geopolitical risk, a build in gasoline supply and a build in Cushing, Oklahoma is keeping the market from boiling over. Still, just last week the API reported a 7.385 million barrels drop in crude supply and this is indicative of a situation where demand by refiners is exceeding supply and causing this draw. The market won’t be able to ignore this much longer.
Yet, the API did report another build in gasoline inventories at 2.001 million barrels, which was in line with expectations but we saw a drop in distillates where supply globally is well below average in the strongest demand period of the year.
This comes as geopolitical risk is on the rise. Fox News reported that the Saudi-led coalition fighting Yemen’s Shiite rebels, announced it intercepted a missile fired over southern Riyadh Tuesday, while the Yemeni rebels said they targeted the royal palace in the kingdom’s capital. U.S. officials at the Pentagon confirmed to Fox News Saudi Arabia’s report that the Houthi missile was shot down successfully. < Guess what oil prices will do if the Shiite rebels are successful in hitting a major Saudi oil facility!
“While we don’t yet have sufficient insight into this particular attack, it bears all the hallmarks of previous attacks using Iranian-provided weapons. It is only a matter of time before one of these missiles hits the target. ”If we don’t do something, we will miss the opportunity to prevent further violence from Iran,” U.S. Ambassador Nikki Haley told the U.N. Security Council on Tuesday. This is the secretary-general’s fourth report on the Iranian regime’s lack of full compliance with Resolution 2231. And it is the most damning report yet. This report makes the case that Iran is illegally transferring weapons. < Guess what happens if Trump rips up the Obama "Give the Iranians a Nuke" deal and slaps on sanctions!
Obviously this proxy war between Saudi Ariba and Iran is heating up and if it goes to the next level the risk to global oil production and supply routes will be a major risk. Oil also saw support as it appears that the repairs on the Forties pipeline will be down until January was longer than expected. Bloomberg reports that it will take between 5.5 million and 13 million barrels of oil out of the market before the repairs are complete. Yes we need a little oil!
Roll out the barrels; raise up production before supply falls again. Fill up the tankers, I may be rushing things, but supply is down again now. For we need a little oil, right this very minute, refiners have a window, no matter how bears spin it. And we also need distillate, right this very minute. It hasn't snowed a single flurry, but refiners have to be in a hurry. So producers get busy, build up the production to highs we have never seen. Raise up the out take. It's time to get ready for new tax cut demand now! Supply has grown a little leaner, and its going to get colder, refiners get cracking, it’s time to get bolder. We need a little oil now.
The American Petroleum Institute (API) reported another massive drawdown in U.S. crude supply coming at a drop of 5.222 million barrels last week. That is the third big draw in a row and was almost twice what the market was looking for. The drops add to what has been one of the biggest peak to valley drops in U.S. crude supply and is reflective not only of the success of OPEC production cuts but also evidence that Shale oil producers can’t keep pace with the OPEC production cuts and record compliance.
EIA estimated a decline in U.S. crude oil inventories of 6,495,000 barrels when their report came out this morning.
While the market is showing more concern about the tightening global oil supply situation, and rising geopolitical risk, a build in gasoline supply and a build in Cushing, Oklahoma is keeping the market from boiling over. Still, just last week the API reported a 7.385 million barrels drop in crude supply and this is indicative of a situation where demand by refiners is exceeding supply and causing this draw. The market won’t be able to ignore this much longer.
Yet, the API did report another build in gasoline inventories at 2.001 million barrels, which was in line with expectations but we saw a drop in distillates where supply globally is well below average in the strongest demand period of the year.
This comes as geopolitical risk is on the rise. Fox News reported that the Saudi-led coalition fighting Yemen’s Shiite rebels, announced it intercepted a missile fired over southern Riyadh Tuesday, while the Yemeni rebels said they targeted the royal palace in the kingdom’s capital. U.S. officials at the Pentagon confirmed to Fox News Saudi Arabia’s report that the Houthi missile was shot down successfully. < Guess what oil prices will do if the Shiite rebels are successful in hitting a major Saudi oil facility!
“While we don’t yet have sufficient insight into this particular attack, it bears all the hallmarks of previous attacks using Iranian-provided weapons. It is only a matter of time before one of these missiles hits the target. ”If we don’t do something, we will miss the opportunity to prevent further violence from Iran,” U.S. Ambassador Nikki Haley told the U.N. Security Council on Tuesday. This is the secretary-general’s fourth report on the Iranian regime’s lack of full compliance with Resolution 2231. And it is the most damning report yet. This report makes the case that Iran is illegally transferring weapons. < Guess what happens if Trump rips up the Obama "Give the Iranians a Nuke" deal and slaps on sanctions!
Obviously this proxy war between Saudi Ariba and Iran is heating up and if it goes to the next level the risk to global oil production and supply routes will be a major risk. Oil also saw support as it appears that the repairs on the Forties pipeline will be down until January was longer than expected. Bloomberg reports that it will take between 5.5 million and 13 million barrels of oil out of the market before the repairs are complete. Yes we need a little oil!