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Weekly US oil data
Opec drama overshadows decent data
This week‟s batch of US oil data finally showed some alignment (albeit a month late)
with seasonal supply and inventory trends that we have been flagging for some time.
We believe this week is something of a „turning of the tide‟, as the next several weeks
should result in higher refinery runs, crude draws, and seasonal product builds.
“This is one of the worst meetings we have ever had”
This quote from Saudi Oil Minister Ali al-Naimi truly underlines the divergences
taking place across Opec. Marking the first time in 20 years that the cartel has failed
to reach an agreement, half of the 12-member group opposed lifting output quotas
from 29mb/d to 30.3mb/d. Not surprising was the six countries who voted against
action – they have been fairly vocal in their desire for higher prices. Regardless, the
lack of a united front is certainly bullish crude, and underlines concerns regarding
spare capacity and ability to ramp up production. This is occurring in an already
tightening crude market, as we forecast global demand to increase by 2.1mb/d from
2Q11 to 3Q11, and an additional 160kb/d into 4Q. For the Saudis, they will no longer
seem like the bad guys. They can, and will, increase output as they see fit, but will
simultaneously be able to deflect much of the blame for higher prices by pointing to
the six cartel members who voted against their proposed quota increase. Political
tensions within Opec will likely remain heightened as prices trend higher in the
months leading up to the next meeting, which is scheduled for December.
Top three numbers in today’s weekly US oil data
Crude oil inventories drew significantly lower, -4.8mbs. The decrease was
concentrated in the Midwest and Gulf Coast regions. Levels at Cushing, OK fell by
-1.0mbs.
Downstream stocks turn upward, +6.3mbs, with increases coming from nearly
every category. Most significant were builds of +2.2mbs in gasoline and +3.2mbs
in other products.
Demand growth remains negative at –3.9% (four week MA, y/y), dragged lower
by nearly every product.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Weekly US oil data
Opec drama overshadows decent data
This week‟s batch of US oil data finally showed some alignment (albeit a month late)
with seasonal supply and inventory trends that we have been flagging for some time.
We believe this week is something of a „turning of the tide‟, as the next several weeks
should result in higher refinery runs, crude draws, and seasonal product builds.
“This is one of the worst meetings we have ever had”
This quote from Saudi Oil Minister Ali al-Naimi truly underlines the divergences
taking place across Opec. Marking the first time in 20 years that the cartel has failed
to reach an agreement, half of the 12-member group opposed lifting output quotas
from 29mb/d to 30.3mb/d. Not surprising was the six countries who voted against
action – they have been fairly vocal in their desire for higher prices. Regardless, the
lack of a united front is certainly bullish crude, and underlines concerns regarding
spare capacity and ability to ramp up production. This is occurring in an already
tightening crude market, as we forecast global demand to increase by 2.1mb/d from
2Q11 to 3Q11, and an additional 160kb/d into 4Q. For the Saudis, they will no longer
seem like the bad guys. They can, and will, increase output as they see fit, but will
simultaneously be able to deflect much of the blame for higher prices by pointing to
the six cartel members who voted against their proposed quota increase. Political
tensions within Opec will likely remain heightened as prices trend higher in the
months leading up to the next meeting, which is scheduled for December.
Top three numbers in today’s weekly US oil data
Crude oil inventories drew significantly lower, -4.8mbs. The decrease was
concentrated in the Midwest and Gulf Coast regions. Levels at Cushing, OK fell by
-1.0mbs.
Downstream stocks turn upward, +6.3mbs, with increases coming from nearly
every category. Most significant were builds of +2.2mbs in gasoline and +3.2mbs
in other products.
Demand growth remains negative at –3.9% (four week MA, y/y), dragged lower
by nearly every product.
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