Archives of “Crude” category

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Oil is off to its best start in 30 years

  
Analysis, Crude

Oil up nearly 20% year-to-date

Oil up nearly 20% year-to-date
Is there a more-overlooked asset than oil this year?
It’s been written-off for dead with investment fleeing the sector but oil inventories will be rapidly drawn down in the months ahead. OPEC+ will face increasingly tough decisions about what to do and the March decision could be the difference between $60 oil or much more.
Inflation is still way off the market’s radar but an unexpected spike to $80 or higher in 2022 could flip the script.

Bakers Hughes oil rig count 299 vs 295 last week

  
Analysis, Crude

The weekly rig count

The Baker Hughes rig count for the current week shows:
  • Oil rigs 299 vs. 295 last week and 298 estimate
  • Gas rigs 92 vs. 88 last week and 88 estimate
  • Total rigs 392 vs. 384 last week and estimate of 386
The WTI crude oil is trading up $0.54 or 0.96% $56.77. It is trading close to the lows for the day at $56.43 although still higher on the day. The high price reached $57.29

Oil climbs to a fresh one-year high as OPEC committee meets

  
Analysis, Crude

The extension continues

The extension continues
The break of the oil range has continued today with WTI at the highs of the day and up 62-cents to $55.39.
The measured target of the range break is $56.
The JMMC is meeting has just begun and if they were being honest, I could see them starting to reverse policy on a better demand outlook. However I don’t see any incentive for them to change it up with the climb in oil prices far outpacing whatever they’re losing by holding back production. The consensus is that they won’t recommend any adjustments to policy.
The other thing to watch in oil will be the US weekly report at 1530 GMT (10:30 am ET). The consensus is a -2300K reading on oil but the API numbers late yesterday were bullish:
  • Crude -4261K
  • Cushing -1885K
  • Gasoline -240K
  • Distillates -1622K

Oil breaks out to the highest in a year. What’s next

  
Analysis, Crude

WTI climbs above $55

WTI climbs above $55
Oil prices are breaking out of a sideways trade with a 2.3% rally. WTI briefly touched $55 for the first time since January 2020.
The break from the range is also a rise above the Feb 2020 high of $54.50.
oil
It comes at the start of a strong seasonal period for oil.
OPEC today lowered its 2021 oil demand growth forecast to 5.6 million bpd from 5.9 million bpd but the market is looking more at inventories, which may be quickly drawn down in the coming months.
OCED inventories will be 100 million barrels above the 5-year-average by the end of March 2021, in the forecasts. But by the end of June, they will be lower than the 5-year-average. This year stockpiles will be drawn down each month and fall a total of 406m barrels under the base case.
I believe that oil and oil companies are among the most undervalued assets in the world. The transition to green energy is coming but it will take decades and the lack of investment in oil production is going to cause much higher prices within 2 years.

US weekly oil inventories 4352K vs +2425K expected

  
Analysis, Crude

Weekly US oil inventories

  • Prior was -3248K
  • Gasoline -259K vs +2425K
  • Distllates +457K vs +1800K exp
API data from Wednesday:
  • Oil +2500K
  • gasoline +1100K
  • Distillates +800K
  • Cushing -4300K
That was a larger build in oil and prices have ticked lower but the product data is bullish. WTI last prices down 76-cents to $52.29.
Earlier today it looked like crude might be falling below its recent range but it perked back up after the Markit PMI.
oil chart

US private oil data shows a build of 2.5 million vs. estimate of a draw of -1.2 million barrels

  
Analysis, Crude

Crude oil was trading at $53.25 into the report

The private oil inventory data for the current week shows:
  • crude oil inventories build of 2.5 million vs. estimate of draw of -1.2 million barrels
  • gasoline inventories build of 1.1 million vs. estimate of a build of 2.8 million barrels
  • distillates inventories build 800,000 vs. build of 1.2 million estimate
  • Cushing draw -4.3 million
The price of crude oil has moved lower in the initial reaction and trades at $53.05. The price was trading near $53.25 ahead of the report.
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