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Weekly US oil data
Record WTI discount makes headlines
This week‟s batch of US oil data was constructive, with a decent headline draw
in crude, combined with some less-than-seasonal-average builds in products.
The disappointment in the data comes from the decline in refinery runs, nearly
reversing last week‟s encouraging climb toward 15.0mb/d. Demand was
modestly improved, though overall remains weak relative to last year.
WTI – Brent differential will remain wide for years
The WTI crude price discount to Brent reached an all-time high this past Monday (13
June), near US$-22/b, as the peak refinery utilization season of the summer kicked
off, and we predict that this will stay wide relative to historical levels for at least the
next two years. We‟ve leveraged the expertise of our refining analyst, Chi Chow,
who has provided extensive detail in the publication US independent refiners: Why
WTI crude price discounts will remain wide for years – it’s structural, 10 June 2011
(LINK).
Our analysis suggests the most leveraging factor impacting WTI differentials is the
crude oil supply/demand dynamics in and around the Permian Basin and Cushing
trading hub. We believe crude production and supply in this region will outpace
demand by a wide margin for potentially years to come. On the Brent side, prices
were bid up recently due to the shorter-term effects of a Libyan production shut in
and North Sea maintenance issues. Taken altogether, we estimate that WTI crude
prices will generally trade at a US$-13/b discount to Brent until mid-2013, when
incremental pipeline capacity to carry crude from Cushing to the Gulf Coast is
scheduled for commissioning.
Top three numbers in today’s weekly US oil data
Crude oil inventories drew moderately lower, -3.4mbs. Levels at Cushing,
OK fell by -1.1mbs.
Downstream stocks climb higher, +2.8mbs, with increases coming from
gasoline (+0.6mbs), jet fuel (+1.7mbs), and „other‟ products (+0.9mbs).
Demand growth remains negative at -3.2% (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
Record WTI discount makes headlines
This week‟s batch of US oil data was constructive, with a decent headline draw
in crude, combined with some less-than-seasonal-average builds in products.
The disappointment in the data comes from the decline in refinery runs, nearly
reversing last week‟s encouraging climb toward 15.0mb/d. Demand was
modestly improved, though overall remains weak relative to last year.
WTI – Brent differential will remain wide for years
The WTI crude price discount to Brent reached an all-time high this past Monday (13
June), near US$-22/b, as the peak refinery utilization season of the summer kicked
off, and we predict that this will stay wide relative to historical levels for at least the
next two years. We‟ve leveraged the expertise of our refining analyst, Chi Chow,
who has provided extensive detail in the publication US independent refiners: Why
WTI crude price discounts will remain wide for years – it’s structural, 10 June 2011
(LINK).
Our analysis suggests the most leveraging factor impacting WTI differentials is the
crude oil supply/demand dynamics in and around the Permian Basin and Cushing
trading hub. We believe crude production and supply in this region will outpace
demand by a wide margin for potentially years to come. On the Brent side, prices
were bid up recently due to the shorter-term effects of a Libyan production shut in
and North Sea maintenance issues. Taken altogether, we estimate that WTI crude
prices will generally trade at a US$-13/b discount to Brent until mid-2013, when
incremental pipeline capacity to carry crude from Cushing to the Gulf Coast is
scheduled for commissioning.
Top three numbers in today’s weekly US oil data
Crude oil inventories drew moderately lower, -3.4mbs. Levels at Cushing,
OK fell by -1.1mbs.
Downstream stocks climb higher, +2.8mbs, with increases coming from
gasoline (+0.6mbs), jet fuel (+1.7mbs), and „other‟ products (+0.9mbs).
Demand growth remains negative at -3.2% (four week MA, y/y).
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