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OIL INVENTORY INDICATORS
Key observations
q Crude oil prices are influenced by various factors but demand and supply
remain the most crucial among them. Inventory data provides a useful
snapshot of supply and demand balance i.e. stocks drawn, when consumption
exceeds production or stocks built when the reverse is true.
q With US being the biggest consumer of crude oil in the world, we try to
monitor its oil consumption and inventory levels, which impact the
crude oil price movement. Globally, crude oil traders take cue from the
U.S. weekly surveys hence monitoring this data is of significant prominence.
Also, crude oil is an international commodity so international
crude data is important to follow. We believe that stock statistics act as
a market signal and an indicator of global oil fundamentals.
q Crude oil inventories remains at historically high levels for the week
ended 18 March 2011. U.S. crude inventories rose 2.13 Mn bbls (W-o-W,
as against market expectations 1.6 Mn bbls) and 1.5 mn bbls (Y-o-Y) to
352.8 Mn bbls, as imports rose. Crude imports rose 306 kbopd to 8.95 Mn
bpd
q Inventories at the key Cushing, Oklahoma, terminal rose 177 Kbbls to
40.2 Mn bbls, just short of the record 40.3 Mn bbls reached earlier in
Mar’11. Rising crude oil inventories at Cushing has lead to a wide spread
between US West Texas Intermediate and ICE Brent crude oil prices.
q Fast growing oil supplies from Canada and the Bakken deposit in North
Dakota has lead to inventory buildup at Cushing and the rest of the Midwest.
One of the reasons for growing supplies could be the persistence
of cantango in US crude oil futures.
q U.S distillate stocks rose a small 7,000 bbls (Y-o-Y) to 152.6 Mn bbls, compared
with analyst expectations of a 1.3 Mn bbls draw.
q U.S stocks of gasoline fell 5.32 Mn bbls (W-o-W) and 4.8 Mn bbls (Y-o-Y)
to 219.72 Mn bbls, compared with analyst expectations for a 1.8 Mn bbls
draw. Gasoline inventories have fallen 15 Mn bbls in the first three
weeks of March, the biggest drawdown for the period since at least
1990.
q U.S refinery utilization rose 0.7 percentage points to 84.1 percent of capacity,
compared with analyst expectations of a smaller rise of 0.2 percentage
points.
q Conclusion: Despite high inventories in US, crude oil price is trading at
substantially high levels mainly due to geo-political issues (Libya). We
believe in medium to long term the crude will come down once the issue
in Libya get settled.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
OIL INVENTORY INDICATORS
Key observations
q Crude oil prices are influenced by various factors but demand and supply
remain the most crucial among them. Inventory data provides a useful
snapshot of supply and demand balance i.e. stocks drawn, when consumption
exceeds production or stocks built when the reverse is true.
q With US being the biggest consumer of crude oil in the world, we try to
monitor its oil consumption and inventory levels, which impact the
crude oil price movement. Globally, crude oil traders take cue from the
U.S. weekly surveys hence monitoring this data is of significant prominence.
Also, crude oil is an international commodity so international
crude data is important to follow. We believe that stock statistics act as
a market signal and an indicator of global oil fundamentals.
q Crude oil inventories remains at historically high levels for the week
ended 18 March 2011. U.S. crude inventories rose 2.13 Mn bbls (W-o-W,
as against market expectations 1.6 Mn bbls) and 1.5 mn bbls (Y-o-Y) to
352.8 Mn bbls, as imports rose. Crude imports rose 306 kbopd to 8.95 Mn
bpd
q Inventories at the key Cushing, Oklahoma, terminal rose 177 Kbbls to
40.2 Mn bbls, just short of the record 40.3 Mn bbls reached earlier in
Mar’11. Rising crude oil inventories at Cushing has lead to a wide spread
between US West Texas Intermediate and ICE Brent crude oil prices.
q Fast growing oil supplies from Canada and the Bakken deposit in North
Dakota has lead to inventory buildup at Cushing and the rest of the Midwest.
One of the reasons for growing supplies could be the persistence
of cantango in US crude oil futures.
q U.S distillate stocks rose a small 7,000 bbls (Y-o-Y) to 152.6 Mn bbls, compared
with analyst expectations of a 1.3 Mn bbls draw.
q U.S stocks of gasoline fell 5.32 Mn bbls (W-o-W) and 4.8 Mn bbls (Y-o-Y)
to 219.72 Mn bbls, compared with analyst expectations for a 1.8 Mn bbls
draw. Gasoline inventories have fallen 15 Mn bbls in the first three
weeks of March, the biggest drawdown for the period since at least
1990.
q U.S refinery utilization rose 0.7 percentage points to 84.1 percent of capacity,
compared with analyst expectations of a smaller rise of 0.2 percentage
points.
q Conclusion: Despite high inventories in US, crude oil price is trading at
substantially high levels mainly due to geo-political issues (Libya). We
believe in medium to long term the crude will come down once the issue
in Libya get settled.
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