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Weekly US oil data
Event risk: Egypt and beyond
One week ago, crude oil markets were softening, prices correcting and bearish
indicators sprouting. Tumultuous regime change in Egypt changed all that in the
proverbial heartbeat. Short-sellers were caught out. Brent prices effortlessly scaled
US$100 in four short days -- and have held on to those gains to date. So far the
worry about instability mostly involves rising transportation cost, as cautious shippers
may decide to take a 6000 mile long detour around Africa with some part of the
roughly 2 million barrel per day of oil that normally transits the Suez Canal.
Ultimately, however, markets may have to worry more about the stability of major
exporters. We are less worried about Saudi Arabia, or other rich and sparsely
populated petro-states in the GCC. But we do worry that the issues which came to a
boil so quickly in Tunisia and Egypt are similar to those faced by similarly fragile,
autocratic regimes in Yemen and Algeria. Regional in-security is intensified further
by awkward transitions of power in Lebanon and Jordan. Israel is nervous. And
Saudi Arabia’s king is ageing while his crown prince is in poor health – which
coupled with sharply inflating agricultural commodities could make the “central
banker of oil” react still slower to the bullish imbalance between global demand and
supply.
So, aside from featuring strong demand growth, 2011 is also shaping up as a year
with manifest supply uncertainty and seemingly unending bouts of freakish weather.
Seasonal weakness – but in a narrower timeframe
As for the daily grind in oil markets, however, the theme of seasonal weakness
resurfaced and should be with us for a few more weeks. Physical crude oil markets
will likely soften more. Product markets usually tighten only later February.
Top three numbers in today’s weekly US oil data
Crude oil inventories grew by +2.6 mbls. Four week average imports inched
over 9mb/d, while refinery runs fell further. Stocks at Cushing, OK, also rose.
Total product stocks grew for the 3rd time in 4 weeks. A disproportionally large
+6mbl jump of gasoline stocks drove downstream inventory +2.4mbls higher.
Demand growth decelerated to a meagre +1.2% (four week MA, y/y).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Weekly US oil data
Event risk: Egypt and beyond
One week ago, crude oil markets were softening, prices correcting and bearish
indicators sprouting. Tumultuous regime change in Egypt changed all that in the
proverbial heartbeat. Short-sellers were caught out. Brent prices effortlessly scaled
US$100 in four short days -- and have held on to those gains to date. So far the
worry about instability mostly involves rising transportation cost, as cautious shippers
may decide to take a 6000 mile long detour around Africa with some part of the
roughly 2 million barrel per day of oil that normally transits the Suez Canal.
Ultimately, however, markets may have to worry more about the stability of major
exporters. We are less worried about Saudi Arabia, or other rich and sparsely
populated petro-states in the GCC. But we do worry that the issues which came to a
boil so quickly in Tunisia and Egypt are similar to those faced by similarly fragile,
autocratic regimes in Yemen and Algeria. Regional in-security is intensified further
by awkward transitions of power in Lebanon and Jordan. Israel is nervous. And
Saudi Arabia’s king is ageing while his crown prince is in poor health – which
coupled with sharply inflating agricultural commodities could make the “central
banker of oil” react still slower to the bullish imbalance between global demand and
supply.
So, aside from featuring strong demand growth, 2011 is also shaping up as a year
with manifest supply uncertainty and seemingly unending bouts of freakish weather.
Seasonal weakness – but in a narrower timeframe
As for the daily grind in oil markets, however, the theme of seasonal weakness
resurfaced and should be with us for a few more weeks. Physical crude oil markets
will likely soften more. Product markets usually tighten only later February.
Top three numbers in today’s weekly US oil data
Crude oil inventories grew by +2.6 mbls. Four week average imports inched
over 9mb/d, while refinery runs fell further. Stocks at Cushing, OK, also rose.
Total product stocks grew for the 3rd time in 4 weeks. A disproportionally large
+6mbl jump of gasoline stocks drove downstream inventory +2.4mbls higher.
Demand growth decelerated to a meagre +1.2% (four week MA, y/y).
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