US gasoline prices ahead of Thanksgiving are higher than previous two years… EIA

by Jim Colburn • Wednesday, November 22, 2017

The EIA shows average gasoline prices are higher this Thanksgiving:

 

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Oil moves higher…

by Jim Colburn • Wednesday, November 22, 2017

The Wall Street Journal explains:

””The market’s focus on the OPEC meeting [on Nov. 30] has been temporarily disrupted, with prices supported by the continued outage of a pipeline from Canada to the U.S.,” said Ole Hansen, head of commodity strategy at SaxoBank. “That combined with the big draw report from the (American Petroleum Institute) data has resulted in WTI being the outperformer for a change,” he added.

TransCanada, the company which operates the Keystone pipeline told customers Tuesday that it will reduce oil deliveries via the supply line by 85% through the end of November, according to ING in a note. “The longer the disruption goes on for, the more supportive it will be for WTI, with reduced Canadian flows to the U.S.,” the note added.

That news followed data from the API’, late Tuesday, that showed a 6.4 million-barrel decrease in crude supplies for the week, an 869,000-barrel rise in gasoline stocks and a 1.7 million-barrel decline in distillate inventories, according to a market participant. That drop came partly thanks to lower imports and was “surprisingly pronounced,” Commerzbank analysts said in a note.“

Here is a 5 year look from barchart.com:

 

 

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Record bullish positions by hedge funds… Kemp

by Jim Colburn • Monday, November 20, 2017

John Kemp puts out a weekly chart book which illustrates how very long hedge funds are in the energy complex:

 

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Fed GDP Nowcast updates…

by Jim Colburn • Saturday, November 18, 2017

Both Fed nowcasts estimate Q4 GDP to over 3%… Here is the Atlanta Fed:

And here is New York:

 

 

 

 

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Norway’s wealth fund discovers risk management…

by Jim Colburn • Friday, November 17, 2017

Here is Bloomberg:

”“Our perspective here is to spread the risks for the state’s wealth,” Egil Matsen, the deputy central bank governor overseeing the fund, said in an interview in Oslo. “We can do that better by not adding oil-price risk.””

And this:

”The government, which also controls Statoil ASA and offshore oil and gas fields, was forced to withdrew cash from the fund for the first time last year to meet spending commitments after oil prices dropped.”

One wonders why a more balanced portfolio wasn’t proposed when oil was at $100…

 

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Exchange traded oil funds play increasing role.. EIA

by Jim Colburn • Thursday, November 16, 2017

The EIA has an excellent piece in This Week in Petroleum on the role of ETF’s in oil markets here…  This chart shows how the CFTC categorizes different market players:

“The largest crude oil ETF by total assets is the United States Oil Fund (USOF). USOF’s objective is to track the daily percent changes in front-month WTI futures contracts before fees and expenses. As public interest in USOF has increased in recent years, it created more ETF shares for Authorized Participants to offer to the public for trading. USOF has approximately 200 million outstanding shares, 15 million of which trade daily (as of November 14, Figure 2). Because the value of the shares is backed by crude oil futures contracts, increases and decreases in the number of shares outstanding have a direct effect on the number of contracts the fund holds.”

The US Oil Fund is a “long only” strategy, so the rolls are selling the front month and buying the back month… A market in contango reduces returns of the fund (selling a lower price/buying a higher price):

The oil futures market has reached a new level of interest:

 

 

 

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Venezuela’s crude output at 28-year low… OPEC/Reuters

by Jim Colburn • Wednesday, November 15, 2017

Here is Reuters:

”Oil-dependent Venezuela’s crude output dipped last month below 2 million barrels per day, its lowest level in nearly three decades, global producer group OPEC said on Monday.”

Here is a table of OPEC oil production from OPEC’s Monthly Oil Market Report:

October production for Venezuela was 1.863 mbd which is down almost 300,000 bd from all of 2016…

 

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World Energy Outlook 2017… IEA

by Jim Colburn • Wednesday, November 15, 2017

This is a good one, here, in which the IEA lays out energy supply/demand scenarios for the future in a trader friendly format (lots of pictures/charts)… Here is one small piece:

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World poverty declining… Yasukawa

by Jim Colburn • Wednesday, November 15, 2017

Yoriko Yasukawa, after 35 years at the UN, writes here that poverty is declining:

“And yet we have made some impressive progress despite how deplorable the world may sometimes seem.

Deaths caused by warfare have been on a declining trend following the two World Wars and the number of armed conflicts has also tended downward since the Cold War.

Extreme poverty was more than halved between 1990 and 2015, as have deaths of those under-five years old. Maternal deaths have been cut by 45% and the number of out-of-school children of primary school age by over 40 million.”

Note that most progress takes place in Asia (India and China)… Some might argue that moving toward a free market economy especially in India and China explains the decline…

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OPEC’s Monthly Oil Market Report is out…

by Jim Colburn • Monday, November 13, 2017

OPEC’s Monthly Oil Market Report is out:

World oil demand growth is expected to rise by 1.53 mb/d in 2017 after an upward adjustment of 74 tb/d to account for the better-than-expected performance of China in 3Q17. In 2018, world oil demand is foreseen reaching 1.51 mb/d, around 130 tb/d higher than in the previous assessment.”

And here is their supply/demand balance (note current OPEC production vs the “Difference” category):

 

 

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