Oil Forecasters Aim High… from Bloomberg

by Jim Colburn • Tuesday, December 8, 2015

The difficulty in predicting oil prices a year ahead is clear, as this Bloomberg chart shows…  In January 2015’s Short Term Energy Report (STEO), the EIA calculated a 95% confidence interval of $28 to $112 based on implied volatility of December WTI options prices… We could debate the value of a price range expectation that could be enhanced by any NYC cab driver, but the point remains that these are treacherous markets to analyze and trade… (The EIA will release it’s most current STEO later today…)



And, analysts seem to disregard futures markets when making predictions.. Again, from the Bloomberg article, a chart showing consensus forecasts tend to be over actual traded markets:

“Analyst forecasts are back to looking relatively high vis-a-vis where oil trades in the futures market.”




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As Oil Keeps Falling, Nobody Is Blinking….WSJ

by Jim Colburn • Monday, December 7, 2015

Here is a very nice article in Today’s Wall Street Journal which mentions the sharp increase in oil production from the Gulf of Mexico:



“American shale drillers have only trimmed their pumping a little, and rising oil flows from the Gulf of Mexico are propping up U.S. production. The overall output of U.S. crude fell just 0.2% in September, the most recent monthly federal data available, and is down less than 3%, to 9.3 million barrels a day, from the peak in April.

“Just five years after the worst offshore spill in U.S. history shut down drilling there, companies are on track to pump about 10% more crude than they did in 2014. In September, they produced almost 1.7 million barrels a day, according to the latest federal data.”










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Monthly Diesel Comment

by Andrew Lebow • Sunday, December 6, 2015

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Crude Oil Implied Vol Chart, Updated

by Jim Colburn • Friday, December 4, 2015

The chart shows below implied vol for crude oil options going back to June of 2006 through Thursday, December 3rd, 2015, based on the second nearby at the money option.  Implied vols have increased as the OPEC meeting neared, from 36.6 on November 10th to 45.8 on Wednesday.  We will update this chart next week to show implied vol post-OPEC meeting.  This 10+ year chart shows an area of record low implied vol during the spring and summer of 2014, but record highs of over 120 were made during January of 1991 just before bombs were dropped in Iraq…



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Crude Oil Storage and Capacity…

by Jim Colburn • Thursday, December 3, 2015

From the EIA, Today in Energy:

“Although storage utilization levels along the Gulf Coast and at Cushing are often assessed separately, their combined utilization is currently most relevant given the increased pipeline capacity to move crude oil south from Cushing to the Gulf Coast during a time of high global crude oil inventory builds. Despite relatively high crude oil inventories and storage capacity utilization, there are still more than 100 million barrels of capacity available in these two areas. More information about the interplay between crude oil storage patterns and financial markets is available in This Week in Petroleum.”


graph of U.S. Gulf Coast and Cushing, Oklahoma, crude oil inventories, as explained in the article text


Here is more:


And, from This Week In Petroleum:







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