East Coast refiners receiving more domestic crude oil by rail, tanker, and barge… EIA

by Jim Colburn • Wednesday, August 15, 2018

From This Week In Petroleum:

“As the Brent-WTI spread began widening to average $5/b in the first five months of 2018 and $9/b on June 1, East Coast refineries again increased their receipts of domestic crude oil, but in far lower quantities than in 2015. Domestic crude oil accounted for 18% of total East Coast crude inputs for the first five months of 2018, compared with 55% in the first five months of 2015, when the Brent-WTI spread also averaged $5/b (Figure 2).”

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OPEC’s Monthly Oil Report summary…

by Jim Colburn • Wednesday, August 15, 2018

From OPEC’s Monthly Oil Market Report (released Monday), here is their look at their expectations for world supply/demand:

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US refineries running at near-record high… EIA

by Jim Colburn • Monday, August 13, 2018

The EIA’s Today in Energy has a nice informative piece on US refinery runs:

“For the week ending July 6, 2018, the four-week average of U.S. gross refinery inputs surpassed 18 million barrels per day (b/d) for the first time on record. U.S. refineries are running at record levels in response to robust domestic and international demand for motor gasoline and distillate fuel oil.

Before the most recent increases in refinery runs, the last time the four-week average of U.S. gross refinery inputs approached 18 million b/d was the week of August 25, 2017. Hurricane Harvey made landfall the following week, resulting in widespread refinery closures and shutdowns along the U.S. Gulf Coast.

Despite record-high inputs, refinery utilization as a percentage of capacity has not surpassed the record set in 1998. Rather than higher utilization, refinery runs have increased with increased refinery capacity. U.S. refinery capacity increased by 862,000 barrels per calendar day (b/cd) between January 1, 2011, and January 1, 2018.”

 

 

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Hedge funds cut net length in energy… Kemp, Reuters

by Jim Colburn • Monday, August 13, 2018

John Kemp, Reuters, compiles CFTC data to construct a chart showing long liquidation by funds:

”Hedge funds resumed their liquidation of bullish long positions in petroleum last week, according to the most recent regulatory and exchange data.

Hedge funds and other money managers cut their net long position in the six most important petroleum futures and options contracts by another 30 million barrels in the week to Aug. 7.”

Note the latest data is as of August 7 which misses the meltdown (and more length liquidation) on August 8th…  Here is the link:

https://www.reuters.com/article/us-oil-prices-kemp/frothy-oil-market-turns-increasingly-flat-kemp-idUSKBN1KY1AA

 

 

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Rising costs for US oil producers… WSJ

by Jim Colburn • Monday, August 13, 2018

“American oil companies—primed to reap the benefits of rising prices after years of wringing more from wells for less—are seeing profits erode in the face of rising costs.”

Efficiency gains are flattening out, but what an amazing run:

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Turkey, Russia, Argentina vs. US dollar… WSJ

by Jim Colburn • Saturday, August 11, 2018

The Wall Street Journal’s Daily Shot shows the three currencies under intensive pressure:

Here is Turkey:

And, Russia:

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US Oil Vanishing From Chinese Tariffs… Bloomberg

by Jim Colburn • Saturday, August 11, 2018

 By not including US oil in the tariff slate, the market remains competitive… Here is Bloomberg:
 “China’s original plan to target U.S. crude came at an inopportune time for the country’s buyers. Sinopec’s trading unit, Unipec, was embroiled in a dispute with Saudi Arabia, saying the producer’s prices were costly and cutting purchases just as it was boosting American imports. Two months on, refiners were faced with the risk of supply disruptions from Iran to Venezuela and paying more to take advantage of booming U.S. output.”
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IEA’s Oil Market Report is out…

by Jim Colburn • Friday, August 10, 2018

The IEA’s Oil Market Report is out… Here is what they say about demand from the summary (my bold):

”With so much focus on geopolitics in recent months, underlying demand trends have perhaps received less attention but there are interesting developments. As far as growth is concerned, the global number for 2018 looks solid for now at 1.4 mb/d. However, this is heavily influenced by demand in 1Q18 when growth was more than 1.8 mb/d, mainly due to low temperatures in the northern hemisphere. As we move through 2Q18 and 3Q18, growth is estimated at only 1 mb/d, partly due to comparisons with high year-ago demand levels and because prices (based on Brent crude) have typically been about 45% higher. In OECD Europe, oil demand fell below last year’s level in 2Q18, and in the US falling gasoline demand has contributed to more than the halving of total demand growth in 2Q18 versus 1Q18. The two leading non-OECD oil markets, China and India, both remain on course to grow solidly this year, although data issues with respect to China cloud the picture to some extent. As mentioned in recent editions of this Report, some developing countries are taking steps to shield consumers from higher prices. An example is Indonesia where plans are being made to increase sharply subsidies to maintain diesel and gasoline prices at current levels.”

However, it might not last:

“The recent cooling down of the market, with short term supply tensions easing, currently lower prices, and lower demand growth might not last. When we publish our next report in mid-September, we will be only six weeks away from the US’s deadline for Iran’s customers to cease oil purchases. As oil sanctions against Iran take effect, perhaps in combination with production problems elsewhere, maintaining global supply might be very challenging and would come at the expense of maintaining an adequate spare capacity cushion. Thus, the market outlook could be far less calm at that point than it is today.”

 

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Our August podcast on energy markets is up…

by Jim Colburn • Thursday, August 9, 2018

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US oil, gasoline and distillate stocks… EIA

by Jim Colburn • Thursday, August 9, 2018

From the EIA’s “This Week in Petroleum”, these charts show how US stock levels compare to 5 year highs and lows:

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