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Crude Oil Supply/Demand

Posted: Mon Oct 24, 2016 12:07 pm
by dan_s
Crude Oil/Macro: On 10/18/2016, Reuters reported Saudi Arabia's crude oil exports in August
fell to 7.305 million b/d from 7.622 million b/d in July as the world's largest oil exporter pumped
less, the kingdom said. After the kingdom pumped a record high 10.673 million b/d in July due to
summer demand and requests from customers, its August output dropped to 10.630 million b/d.

On 10/19/2016, Saudi Arabia reported it attracted strong investor demand for its first international
bond offer. A source familiar with the offer said order books had come close to $69 billion, which
involves five, 10 and 30 year tranches. Riyadh ran a record budget deficit of $98 billion last year,
or 15% of GDP and is struggling to cut the gap this year. (Sources: Reuters, Bloomberg)

On 10/19/2016, China reported crude oil output fell 9.8% in September from a year earlier in the
second-biggest year-on-year decline on record, government data showed, with major producers
continuing to shut high-cost wells to rein in spending. Domestic crude output dropped to 3.89
million b/d, near the lowest in six years on a daily basis. The sharp decline follows a record 9.9%
decrease in August.

On 10/17/2016, Reuters informed that U.S. shale oil production was expected to fall for a 12th
consecutive month in November, according to the EIA. November oil production was expected to
fall by 30,000 b/d to 4.43 million b/d, the lowest output since March 2014. The biggest decline
was in the Eagle Ford in Texas, which was set to drop by 35,000 b/d to 947,000 b/d. In North
Dakota, oil production in the Bakken was set to drop by 21,000 b/d to 946,000 b/d. Permian output
is set to rise by 30,000 b/d to a record high over 2 million b/d, its third monthly increase in a
row, according to EIA data. Total natural gas production, meanwhile, was forecast to decline for
a seventh consecutive month in November, to the lowest level since July 2015, the EIA said. The
biggest regional decline was expected to be in the Eagle Ford, down almost 0.2 Bcf/d from October
to 5.6 Bcf/d in November, the lowest level of output in the basin since November 2013, the EIA
said. Output in the Marcellus formation was expected to rise by almost 0.1 Bcf/d from October to
18.2 Bcf/d in November. That would be its first increase since July.

U.S. Vehicle Miles Traveled (VMT): a strong August 2016, as U.S. drivers steered 9.19 billion
miles per day, which is an all-time record for this month of the year and represents a strong 3.4%
increase versus last year at this time. VMT hasn’t grown by this much since March, and it raises
the YTD total 2.7%.