oil
Re: oil
Raymond James comments:
This week's petroleum inventories update was bearish relative to consensus. ''Big Three'' petroleum inventories (crude, gasoline, distillates) rose by 2.8 MMBbls, versus consensus estimates for a draw of 4.1 MMBbls. Crude inventories fell by 1.4 MMBbls, versus consensus calling for a draw of 3.1 MMBbls. Cushing crude inventories fell by 0.6 MMBbls, with Gulf Coast inventories down 0.9 MMBbls. Gasoline inventories increased by 2.9 MMBbls, versus consensus calling for a draw of 1.9 MMBbls; while distillate inventories rose by 1.2 MMBbls, versus consensus calling for a build of 0.8 MMBbls. Total petroleum inventories were up 3.3 MMBbls. As always, regardless of their week-to-week movements, U.S.-inventories do not constitute a holistic picture of global (or even total OECD) inventories, but represent the only ''real-time'' data source.
Refinery utilization increased to 96.6% from 96.1% last week. Total petroleum imports were 10.2 MMBbls per day, up from last week's 10.0 MMBbls per day. Total petroleum product demand increased 1.7% after last week's 5.2% decrease. On a four-week moving average basis, there is a 0.6% y/y decrease in total demand. U.S. (Lower 48) production was 10.5 MMBbls per day, down 0.1 MMBbls from last week (recall, the EIA began rounding to the nearest 100,000 Bbls per day as of June). As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
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Actually these are relatively small number and should not have had that much of an impact on the oil traders. Remember that the vast majority of oil trades are done by speculative day-traders. $Million of dollars in oil futures trades are made daily by computers. One hedge fund's block trade in the morning can cause a cascade of stop loss trades to be triggered. This is probably all that happened today.
This world now consumes over 100 million barrels per day of hydrocarbon based liquid fuels and feed stock. OVER 3 BILLION BARRELS PER MONTH. A high percentage of these essential products are refined from crude oil. So, is a couple million barrels move or less in the inventory over a seven day period really cause for a big swing in the oil price? BTW U.S. oil production is now flat, so changes in the crude oil inventory is primarily the result of unloading more of less oil off tankers. Is moving oil from offshore storage to an onshore tank really an increase in the world's oil supply? NO.
This week's petroleum inventories update was bearish relative to consensus. ''Big Three'' petroleum inventories (crude, gasoline, distillates) rose by 2.8 MMBbls, versus consensus estimates for a draw of 4.1 MMBbls. Crude inventories fell by 1.4 MMBbls, versus consensus calling for a draw of 3.1 MMBbls. Cushing crude inventories fell by 0.6 MMBbls, with Gulf Coast inventories down 0.9 MMBbls. Gasoline inventories increased by 2.9 MMBbls, versus consensus calling for a draw of 1.9 MMBbls; while distillate inventories rose by 1.2 MMBbls, versus consensus calling for a build of 0.8 MMBbls. Total petroleum inventories were up 3.3 MMBbls. As always, regardless of their week-to-week movements, U.S.-inventories do not constitute a holistic picture of global (or even total OECD) inventories, but represent the only ''real-time'' data source.
Refinery utilization increased to 96.6% from 96.1% last week. Total petroleum imports were 10.2 MMBbls per day, up from last week's 10.0 MMBbls per day. Total petroleum product demand increased 1.7% after last week's 5.2% decrease. On a four-week moving average basis, there is a 0.6% y/y decrease in total demand. U.S. (Lower 48) production was 10.5 MMBbls per day, down 0.1 MMBbls from last week (recall, the EIA began rounding to the nearest 100,000 Bbls per day as of June). As always, weekly demand and supply figures are provisional estimates subject to frequent revisions.
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Actually these are relatively small number and should not have had that much of an impact on the oil traders. Remember that the vast majority of oil trades are done by speculative day-traders. $Million of dollars in oil futures trades are made daily by computers. One hedge fund's block trade in the morning can cause a cascade of stop loss trades to be triggered. This is probably all that happened today.
This world now consumes over 100 million barrels per day of hydrocarbon based liquid fuels and feed stock. OVER 3 BILLION BARRELS PER MONTH. A high percentage of these essential products are refined from crude oil. So, is a couple million barrels move or less in the inventory over a seven day period really cause for a big swing in the oil price? BTW U.S. oil production is now flat, so changes in the crude oil inventory is primarily the result of unloading more of less oil off tankers. Is moving oil from offshore storage to an onshore tank really an increase in the world's oil supply? NO.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: oil
The grapevine says..
Tariffs includes Oil today.
China's new tariffs today tanked oil prices and energy equities, largely because the targeted U.S. goods include crude oil and diesel. China has become a key market for burgeoning U.S. energy exports.
West Texas Intermediate plunged 3.41% today to close at $66.81 per barrel. Brent North Sea crude fell 3.23% to close at $72.24/bbl.
Tariffs includes Oil today.
China's new tariffs today tanked oil prices and energy equities, largely because the targeted U.S. goods include crude oil and diesel. China has become a key market for burgeoning U.S. energy exports.
West Texas Intermediate plunged 3.41% today to close at $66.81 per barrel. Brent North Sea crude fell 3.23% to close at $72.24/bbl.
Re: oil
The refineries in Europe and Canada need light oil. Plus, lots of other Asian markets will take U.S. light oil. We don't need to sell oil to China.
TODAY OECD inventories are on steady decline of about a million barrels per day. Decline will slow a bit in September & October, but sanctions on Iran will make the market very tight.
Go to my August 4th podcast and stare at slide 7 for about 5 minutes. Take a hard look at the WTI prices on the right side of the chart. That is where s/b heading if OECD inventories continue to fall. OECD inventories are now at 28 days of supply. The last time that happened, WTI was at $95/bbl.
Now go to the left corner and look where that chart came from.
Now go to slide 5 and see what happens when IMO 2020 goes into effect.
TODAY OECD inventories are on steady decline of about a million barrels per day. Decline will slow a bit in September & October, but sanctions on Iran will make the market very tight.
Go to my August 4th podcast and stare at slide 7 for about 5 minutes. Take a hard look at the WTI prices on the right side of the chart. That is where s/b heading if OECD inventories continue to fall. OECD inventories are now at 28 days of supply. The last time that happened, WTI was at $95/bbl.
Now go to the left corner and look where that chart came from.
Now go to slide 5 and see what happens when IMO 2020 goes into effect.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: oil
My understanding of the question here was not the forecast of the future price of oil but MK asked about the spread of WTI vs Brent as a result of The China Tariff.
ie: should they fall together as happened earlier this week as a result of the tariff of should the prices diverge. Should Brent benefit from the tariff at the expense of WTI.
ie: should they fall together as happened earlier this week as a result of the tariff of should the prices diverge. Should Brent benefit from the tariff at the expense of WTI.