Archives of “Crude” category

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US weekly EIA oil inventories +15177K vs +9250K expected

  
Analysis, Crude

Weekly petroleum inventories

  • Prior week was 13833K
  • Gasoline +10497K vs +5550K exp
  • Distillates +476K vs +1500K
  • Refinery utilization -6.7% vs -2.15% exp
  • Cushing +6417K
  • Production 12.4 mbpd vs 13.0 mbpd prior
That’s a lot of oil going into storage in two weeks and Saudi cargoes are just starting to land.
API numbers from late yesterday:

  • Crude: +11,938K
  • Gasoline: +9445K
  • Distillates: -177K

India to stock up on strategic oil reserves to take advantage of low prices – report

  
Analysis, Crude

Bloomberg reports, citing officials with knowledge of the matter

  • India is set to snap up millions of barrels of Middle East crude
  • The purchases are in line with global efforts to stabilise energy markets
  • This comes after Indian oil minister spoke to US, Saudi counterparts
The sources also say that the finance ministry has already approved the request and that India is seeking to buy around 5.5 million barrels from the UAE and about 9.2 million barrels from Saudi Arabia, with some additional purchases from Iraq.
The report notes that India has space for an additional 15 million barrels of crude currently. For some context, India is the world’s third biggest oil consumer – after the US and China.
Oil isn’t really moving on the report as prices are still up by just over 3% on the day at around $24.40 now. That is closer to the lows for the day though, after a fall from around $25.20 at the start of the European morning.

Why OPEC+ will cut even without US participation

  
Analysis, Crude
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You don’t need $20 oil to kill shale

There’s a narrative emerging around OPEC+ and shale: The mainstream thinking is that Russia and Saudi Arabia want to drive crude prices lower to kill US frackers.
I don’t think it’s correct, or at least not wholly correct.
The reality is that shale didn’t make any money in 2019 at $55 oil. Even at that price, it was on its way to mass insolvencies, albeit at a slower pace. I’ve been writing about the bust in shale for more than a year.
All this talk that OPEC+ wont’ cut without the US is a bluff. Why? Because shale is still going bust at $30-$40 oil.

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IEA says 10 mbpd cut not enough, RIA says OPEC meeting next week may not happen

  
Analysis, Crude

Some negative oil headlines cross

Two headlines have helped to sap some strength from the oil market:
  • IEA says an OPEC+ cut of 10 million barrels per day is not enough to stabilize the oil market
  • Even with the cut they see a potential 15 mbpd build in supplies
  • They urged all countries to fill up strategic reserves
Meanwhile Russian news agency RIA, citing an unidentified person said the April 6 meeting may not happen if the sides aren’t ready.
A key cog is the US and the Texas Railroad Commission is meeting April 14 so they can’t even really come to the table until then.

WTI breaks $28 in the second day of big gains as the crude market embraces socialism

  
Analysis, Crude

Crude oil up more than 10% today

Crude oil up more than 10% today
WTI crude oil broke yesterday’s spike high and ran to the best levels of the day after Russia said it was ready for oil output cuts if the US and Saudi Arabia also join in.
WTI is up $2.62 to $27.98 after hitting $28.56 at the highs.
I’m starting to think we need to tag $30 before it all falls apart again.
The headline that didn’t get enough attention yesterday was from Exxon who said they’re not seeking state intervention in energy markets. They said the free market was the best way of resolving oil imbalances.
They have a meeting with Trump today and I expect them to tell him the same thing. Exxon alone producers 3.833 million barrels per day. They were downgraded from AAA to Aa1 by Moody’s yesterday but they still have a great balance sheet.
It’s in their best interests to kill small and medium US producers and pick up their assets for pennies on the dollar. That’s brutal but it’s capitalism.

OPEC+ delegate said to see a global output cut of 10 mil bpd as a realistic goal

  
Analysis, Crude

Bloomberg with the headlines, citing an OPEC+ delegate on the matter

OPEC
  • OPEC+ wants global oil producers meeting as soon as possible
  • OPEC+ encouraging other producers to join the meeting
The only thing we know for sure is that the virtual meeting is almost certainly going to take place next Monday. There are not much details of who will be participating, not even Russia at this stage let alone other producers such as the US, Canada or even Mexico.
There have been many whispers doing the rounds on what propositions they may be discussing but the range seems to be from around 6 mil bpd to 10 mil bpd worth of cuts – depending on who you ask that is.
Saudi sources are leaning towards being more conservative but other reports so far are suggesting a bigger chunk of output cuts that is to be discussed.
Meanwhile, Russia is also said to be only willing to join if the US contributes. So, make what you will of that speculative information.
For now, all this huffing and puffing is underpinning oil prices as we see oil turn around a 4% loss in Asia Pacific trading to a 4% gain now – rising from $23.70 to $26.40.

Saudi supports cooperation to stabilise oil market, blames Russia for current turmoil – Gulf source

  
Analysis, Crude
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Actions speak louder than words

Oil
According to Reuters – citing a senior Gulf source familiar with Saudi Arabia – the kingdom “has always welcomed cooperation among oil producers to stabilise the market, based on the principles of fairness and equity”.
Adding that producers were forced to end all voluntary supply restraint because of Russia’s rejection to deeper oil output cuts in the OPEC+ meeting last month.
“It was Russia’s position that triggered the collapse of the OPEC+ agreement.. this caused massive instability in oil markets”, said the source.
Well, actions speak louder than words. The fact that both sides continue to put on this show for the world, where they are still not talking, just means that no real cooperation is imminent and that continues to bode ill for oil prices so long as this continues.
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