US exports of crude oil and petroleum products…EIA

by Jim Colburn • Tuesday, June 27, 2017

They have doubled since 2010… From the EIA’s Today in Energy:

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Investors Still Own Worst Enemy… DALBAR

by Jim Colburn • Tuesday, June 27, 2017

The Big Picture posted the graph below taken from Index Fund Investors which in turn cites DALBAR…

And here are annual returns averaged over 30 years:

 

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Hedge funds cut bullish bets on oil… Kemp, Reuters

by Jim Colburn • Monday, June 26, 2017

John Kemp, Reuters, updates hedge fund net positions in week ending June 20th:

Here is the Kemp article:  http://www.reuters.com/article/oil-hedgefunds-kemp-idUSL8N1JN2MG

 

 

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West Texas Drillers squeezed… Houston Chronicle

by Jim Colburn • Monday, June 26, 2017

Lower oil prices and rising costs are squeezing West Texas drillers  reports the Houston Chronicle:

“The average oil well in the prolific region now breaks even at about $43 a barrel – the price at which U.S. oil settled on Friday – up from about $39 a barrel at earlier this year, according to energy research firm Wood Mackenzie.”

Here is the link: http://www.chron.com/business/energy/article/Lower-oil-prices-and-rising-costs-squeeze-West-11245048.php

 

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Plastics…WSJ

by Jim Colburn • Monday, June 26, 2017

The shale revolution is leading to a boom in the production of plastics… Here is the WSJ:

“That boom in drilling has expanded the output of oil and gas in the U.S. more than 57% in the past decade, lowering prices for the primary ingredients Dow Chemical Co. DOW -0.56% uses to make tiny plastic pellets.”

“The scale of the sector’s investment is staggering: $185 billion in new U.S. petrochemical projects are in construction or planning, according to the American Chemistry Council. Last year, expenditures on chemical plants alone accounted for half of all capital investment in U.S. manufacturing, up from less than 20% in 2009, according to the Census Bureau.”

“By the end of the decade, energy consultancy PCI Wood Mackenzie estimates the U.S. chemical industry will have increased its capacity to make ethylene by 50%.

The world consumed more than 147 million metric tons in 2016 of ethylene and will need more than 186 million tons by 2023 to meet global demand, according to the consultancy. It said U.S. exports of polyethylene, the plastic pellets, are expected to reach $10.5 billion by 2020.”

 

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Miles traveled update… dshort.com/Advisor Perspectives

by Jim Colburn • Saturday, June 24, 2017

Advisor Perspectives updates data from the Department of Transportation to show total vehicle miles traveled and as a population adjusted series… Together they support the narrative that we are driving more (more people working, more people, low gasoline prices, etc.) and we are driving less (more nesting behavior, aging population)… The data released in June is as of April:

 

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Libya and DUCs… Bloomberg

by Jim Colburn • Tuesday, June 20, 2017

Reasons for weakness in crude from Bloomberg:

“Another factor feeding trader angst is a rise in the number of drilled-but-uncompleted wells in the nation’s oilfields. At the end of May, there were 5,946 wells in this category, the most in at least three years, according to estimates by the EIA. In the last month alone, explorers drilled 125 more wells in the Permian Basin than they would open.”

 

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U.S. refineries running at record-high levels…. EIA

by Jim Colburn • Tuesday, June 20, 2017

Some good charts from the EIA in Today in Energy:

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Inflation has not yet followed lower unemployment in America… The Economist

by Jim Colburn • Monday, June 19, 2017

“Excluding food and energy, prices are only 1.5% higher than a year ago; the Fed’s inflation target is 2%. But Ms Yellen thinks unemployment is below its so-called “natural” rate, so inflation should soon rise. Is she right? Or has the relationship between unemployment and inflation, dubbed the Phillips curve, gone missing?”

Here is the chart:

Here is the link:  http://www.economist.com/news/finance-and-economics/21723422-economists-and-federal-reserve-are-not-about-abandon-phillips

 

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Crude oil options implied volatility chart, updated…

by Jim Colburn • Monday, June 19, 2017

Here is a chart of WTI crude oil implied volatility through and including Friday, June 16th… The series is based on implied vol of the at the money, second nearby option:

The chart goes back to 2007 illustrating many spikes in volatility.. Lower prices are correlated with higher vol… Note that the low in the chart occurred a few months before crude oil prices collapsed… The long term average implied volatility is around 33%…  Average daily volume in May (with an OPEC meeting) was 241,396, compared with a year to date number of 186,793…

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