Petroleum imports/exports, US… EIA

by Jim Colburn • Thursday, April 19, 2018

From the EIA’s Today in Energy:

”U.S. net petroleum trade, including crude oil, petroleum products, and natural gas plant liquids, has fallen in recent years, reaching 3.7 million barrels per day (b/d) in 2017. This is the lowest level of net petroleum trade (imports minus exports) since 1971. At the same time, total U.S. gross petroleum trade (imports and exports) has reached an all-time high of 16.3 million b/d in 2017.”

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More on the Permian bottleneck from the WSJ…

by Jim Colburn • Thursday, April 19, 2018

Alison Sider and Bradley Olsen have a nice piece on pipeline congestion and bottlenecks getting oil out of the Permian here

The Midland-Cushing spread has collapsed:

Production keeps rising….

bumping into pipeline capacity…

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A little history of WTI options…

by Jim Colburn • Tuesday, April 17, 2018

A little history in WTI options: After a little more than two years of being listed, the WTI oil options contract showed us why it was so different… Going into the late November 1988 OPEC meeting, the market was in flux, trading around $14… OPEC was producing way over quotas at around 22.5 mbd vs. 18.5… OPEC eventually reached an accord, prices shot up (+$1.50 off a $14 base) and volatility was crushed from a high of 51.6% pre-meeting to 37.8 post meeting and down to 29.3% soon after… Some traders were so very long volatility going into the meeting, expecting and getting a strong price move… They still blew out! We had never seen an implosion of vol that hard, that fast, nor had we seen traders blow up due to a decline in vol… What we didn’t know was this was just a warmup for the main volatility event (Iraqi invasion of Kuwait, Gulf War, “regrettably”)… By the way, from this OPEC meeting the interview question, “construct an option trade that is long gamma/short vol”, came about… Here is the chart from that period:

 

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Most active strike, WTI… CME

by Jim Colburn • Monday, April 16, 2018

The CME’s excellent option tool here shows the most open interest in June $60 puts, now at 48,087… This is a “teeny” one, settling at $.24… Despite higher prices, recent volume and open interest has focused on this strike… (just a reminder… buyers and sellers are required to indicate a trade, so when you hear “there is a lot of put buying”, there is also put selling)…

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Venezuela’s oil production…Oilprice.com

by Jim Colburn • Saturday, April 14, 2018

Here is Julianne Geiger, Oilprice.com, reporting on OPEC’s monthly report (released Thursday):

”…Venezuela’s production fell by 55,000 barrels per day in March, to 1.488 million bpd. According to the report, Venezuela’s self-reported production fell by a greater amount—77,000 bpd, from 1.586 million bpd in February to 1.509 million bpd in March. Depending on which source information one uses (secondary source vs. direction communication), Venezuela’s production has decreased oil production between 100,000 and 200,000 barrels per day.”

And, this:

”Analyst consensus is that Venezuela is unlikely to pull out of this tailspin. In fact, Venezuela’s position is likely to worsen, with Venezuelan refineries expected to close as crude shortages and underinvestment continue to bite, according to S&P Global Platts.

 

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The Aramco Accounts… Bloomberg

by Jim Colburn • Friday, April 13, 2018

I didn’t see a byline but Bloomberg analyzes Saudi Aramco here…  Yes, there will be interest in the IPO…

“Using a rough measure of total oil, condensate and gas production, Aramco spent less than $4 per barrel to pump hydrocarbons, compared to similarly rough calculations of around $20 a barrel for Exxon and Shell.”

 

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Supply/Demand balance… IEA, EIA

by Jim Colburn • Friday, April 13, 2018

Two charts from the monthly oil market reports of the International Energy Agency and the Energy Information Agency  show how they differ significantly… The first chart is from the IEA, showing world demand outstripping supply for the balance of 2018:

The EIA, however, shows stock builds for the balance of the year…

 

 

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Oil glut?… WSJ

by Jim Colburn • Thursday, April 12, 2018

Here is the Wall Street Journal:

”Excess inventories of stored oil by the world’s industrialized economies are now at their lowest level in more than three years, based on a five-year running average, according to data released Thursday by the Organization of the Petroleum Exporting Countries. After months of steepening declines, the cartel said commercial inventory levels shrunk a further 17.4 million barrels in February, to about 2.85 billion barrels.”

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Supply/demand balance.. EIA

by Jim Colburn • Wednesday, April 11, 2018

From the EIA’s Short Term Energy Outlook here

From this chart, the EIA sees mostly builds in inventories until 2019… The IEA and OPEC release their monthly oil reports later this week and will likely show a much tighter situation/outlook for oil markets…

 

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Midland/Magellan East Houston… EIA

by Jim Colburn • Wednesday, April 11, 2018

This is from the EIA’s Short Term Energy Outlook released yesterday:

“Crude oil production in the Permian region of Texas and New Mexico could be facing pipeline constraints, which is reflected in a widening discount of WTI Midland crude oil prices to Magellan East Houston crude oil prices. The WTI Midland price discount settled at -$8.70/b on April 5, the largest discount since price postings for Magellan East Houston began in 2016…”

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