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Weekly US oil data
Seasonally weak fundamentals
Normally, seasonally weak crude oil fundamentals push oil prices down in early
February. But of late that running theme in weekly US oil data is just one of the
factors driving prices. Today, for instance, a weaker dollar, more upbeat news on the
US recovery, and a string of supply issues as well as anxiety about instability in
North Africa and the Mideast are all pushing Brent oil futures back up above
US$100/b again, while WTI is struggling to end the day unchanged. While the
structure of Brent futures curves has deteriorated materially in the last five trading
days, Brent flat price is within 1% of where it was a week ago.
Headlines on Egypt and WTI’s zany looking discounts
Regime change in Egypt is still playing out. Risk of a disruption to 2-3million barrels
a day of oil trade transiting the country is small, but cannot be dismissed as long as
high level politics remain unsettled. Such risk would rise if opposition groups were to
get more desperate. In addition, the risk of selling Brent flat prices rises as refining
margins for European gas oil firm, even though the overall s/d balance for prompt
Brent supply has loosened significantly.
None of this, or stronger gasoline margins, appear to have any relevance for WTI
futures here in the US. WTI discounts to Brent exceeded US$15/b today. And the
discount of the prompt futures month to the next one has blown out to -$3.20/b, or
more. Despite a reported draw on regional inventory last week, markets for WTI
appear to be pricing for acute distress and more regional producers may opt to send
supplies elsewhere on trucks as well as trains.
Top three numbers in today’s weekly US oil data
Crude oil inventories east of the Rockies drew -1.5 mbs – though a big,
+3.4mb West Coast build prompted a national, and headline, build of +1.9mbs.
Further slippage in crude oil imports (-1%, wk/wk), was more important.
Downstream stocks grew for the 4th time in 5 weeks. Another, large jump
(+4.7mb) in gasoline stocks drove downstream inventory +1.3mbls higher.
Demand growth decelerated to a meagre +0.8% (four week MA, y/y) as use of
transportation-fuels went nowhere – which does not worry us too much yet.
Weekly oil product demand lower...
...as distillate demand retreats
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Weekly US oil data
Seasonally weak fundamentals
Normally, seasonally weak crude oil fundamentals push oil prices down in early
February. But of late that running theme in weekly US oil data is just one of the
factors driving prices. Today, for instance, a weaker dollar, more upbeat news on the
US recovery, and a string of supply issues as well as anxiety about instability in
North Africa and the Mideast are all pushing Brent oil futures back up above
US$100/b again, while WTI is struggling to end the day unchanged. While the
structure of Brent futures curves has deteriorated materially in the last five trading
days, Brent flat price is within 1% of where it was a week ago.
Headlines on Egypt and WTI’s zany looking discounts
Regime change in Egypt is still playing out. Risk of a disruption to 2-3million barrels
a day of oil trade transiting the country is small, but cannot be dismissed as long as
high level politics remain unsettled. Such risk would rise if opposition groups were to
get more desperate. In addition, the risk of selling Brent flat prices rises as refining
margins for European gas oil firm, even though the overall s/d balance for prompt
Brent supply has loosened significantly.
None of this, or stronger gasoline margins, appear to have any relevance for WTI
futures here in the US. WTI discounts to Brent exceeded US$15/b today. And the
discount of the prompt futures month to the next one has blown out to -$3.20/b, or
more. Despite a reported draw on regional inventory last week, markets for WTI
appear to be pricing for acute distress and more regional producers may opt to send
supplies elsewhere on trucks as well as trains.
Top three numbers in today’s weekly US oil data
Crude oil inventories east of the Rockies drew -1.5 mbs – though a big,
+3.4mb West Coast build prompted a national, and headline, build of +1.9mbs.
Further slippage in crude oil imports (-1%, wk/wk), was more important.
Downstream stocks grew for the 4th time in 5 weeks. Another, large jump
(+4.7mb) in gasoline stocks drove downstream inventory +1.3mbls higher.
Demand growth decelerated to a meagre +0.8% (four week MA, y/y) as use of
transportation-fuels went nowhere – which does not worry us too much yet.
Weekly oil product demand lower...
...as distillate demand retreats
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