Energy Prospectus

April 1, 2015: The crude oil storage builds should be lower in April and we may see draws by the end of April. Most refineries have completed their annual maintenance and will be ramping up production of summer grade gasoline. Summer grades of gasoline use less NGL, so demand for crude oil increases. Global demand for refined products is expected to increase by ~2 million bbls per day over the next six months.

CRUDE OIL INVENTORY/’000 bbls (Week Ended 3/27/15)

Current: 471,444
Actual Build/(Withdrawal): 4,766
Economist Average Estimate: 4,181
Previous: 466,678

Compare to total U.S. storage capacity of approximately 640 million bbls.

Sent from one of members in Houston: "Refineries are adding on average 125,000 barrel per day to capacity as they come off spring turn-arounds."

dan_s wrote:April 1, 2015: The crude oil storage builds should be lower in April and we may see draws by the end of April. Most refineries have completed their annual maintenance and will be ramping up production of summer grade gasoline. Summer grades of gasoline use less NGL, so demand for crude oil increases. Global demand for refined products is expected to increase by ~2 million bbls per day over the next six months.

CRUDE OIL INVENTORY/’000 bbls (Week Ended 3/27/15)

Current: 471,444
Actual Build/(Withdrawal): 4,766
Economist Average Estimate: 4,181
Previous: 466,678

Compare to total U.S. storage capacity of approximately 640 million bbls.

The addition of NGLs to gasoline is to achieve a vapor pressure necessary to achieve the needed winter volatility. What will happen to the price of NGLs and the economics of "wet" gas in the Utica/Marcellus? Also, how does this affect the potential over supply of light oil from shales?

Bob

NGL prices have come way down. Yes, the economics in the Utica and Marcellus suck right now. WTI will continue to trade at a big discount to Brent until Washington approves exporting crude oil, however don't hold your breath on that happening anytime soon.