Supply/Demand balance… EIA

by Jim Colburn • Wednesday, November 7, 2018

The EIA is expecting stock builds in the current quarter and all of 2019…

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Bakken, Western Canada Select vs. Brent price spreads… EIA

by Jim Colburn • Wednesday, November 7, 2018

The EIA’s Short Term Energy Outlook, here, has a nice chart showing some key oil spreads, with an explanation (my emphasis):

“Even though total U.S. refinery utilization was about average for this time of year, it was particularly low in the Midwest, Petroleum Administration for Defense District (PADD) 2. Four- week average refinery utilization for the week ending October 26 was 73%, which, if confirmed in EIA’s monthly data, would be the lowest utilization rate in the region for any month in EIA data back to 1985. Several large refineries planned month-long maintenance, which lowered the demand for and the prices of major crude oils that are typically processed in these refineries, including Western Canada Select (WCS) and Bakken. In October, the WCS–Brent spread traded at the lowest level since 2012, settling at -$53.88/b on November 1, and the Bakken–Brent spread hit its lowest level since 2013, settling at -$29.38/b on November 1 (Figure 3). Transportation constraints in Western Canada have resulted in more crude oil that must be delivered by rail, a more expensive option than pipelines, which further affects the crude oil discounts at a time of low refinery demand. In the Bakken region, available pipeline capacity could begin to face constraints as production in the region is estimated to approach 1.4 million b/d in November, an alltime high.

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Oil Drilling Spreads Across African Continent… Bloomberg

by Jim Colburn • Tuesday, November 6, 2018

Paul Burkhardt, Bloomberg, writes:

“In 2018, the number of oil and gas rigs in Africa reached a three-year high, according to Baker Hughes. There are more prospects to come as the Republic of Congo, the newest member of the Organization of Petroleum Exporting Countries, offers both onshore and offshore blocks.”

The link is here

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ConEd gets approval for natural gas demand response pilot program… EIA

by Jim Colburn • Monday, November 5, 2018

Rising natural gas demand meets no new gas pipelines… Here is the EIA:

”Con Edison estimates that, by the winter of 2023–2024, its firm pipeline contracts will meet only 78% of its peak-day demand absent any new pipeline capacity. However, no remaining firm pipeline capacity is currently available into New York City or Westchester County, and recent attempts to add pipeline capacity have stalled as a result of regulatory challenges. Con Edison is now planning alternative measures, including DR, to reduce reliance on interruptible contracts and to help ensure all its customers are served on the coldest days of the year.”

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Hedge funds cut net length… Reuters

by Jim Colburn • Monday, November 5, 2018

John Kemp, Reuters, shows us how much hedge funds have cut net length in petroleum positions, here

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Giving up on the Dec19 $100 call?

by Jim Colburn • Friday, November 2, 2018

While traders’ motives can never be certain without direct knowledge, yesterday’s trading activity in Dec19 $100 calls seem to indicate some (or one) traders are reducing positions, 8,577 trade reducing open interest by 5,485:

 

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Oil pipeline/refinery map.. CAPP

by Jim Colburn • Thursday, November 1, 2018

The Canadian Association of Petroleum Producers put out an excellent map, here

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US monthly crude oil production exceeds 11mbd in August… EIA

by Jim Colburn • Thursday, November 1, 2018

This from the Energy Information Agency’s Today in Energy, here:

”U.S. crude oil production reached 11.3 million barrels per day (b/d) in August 2018, according to EIA’s latest Petroleum Supply Monthly, up from 10.9 million b/d in July. This is the first time that monthly U.S. production levels surpassed 11 million b/d. U.S. crude oil production exceeded the Russian Ministry of Energy’s estimated August production of 11.2 million b/d, making the United States the leading crude oil producer in the world.”

 

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The Big Three… AEI

by Jim Colburn • Wednesday, October 31, 2018

From the blog Carpe Diem, here:

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Hedge Funds Lose Conidence in Oil… WSJ

by Jim Colburn • Tuesday, October 30, 2018

While reading this article, I kept thinking, are hedge funds biased toward buying oil?  Yes, the “long-only” strategies probably dwarf “short-only strategies, but are some traders (especially those coming from equity markets) only comfortable going long oil?  Read the whole thing, here

”For much of 2018, robust demand world-wide and shrinking exports from Iran and Venezuela helped propel prices higher. Now, investors and traders anticipate higher output from Saudi Arabia and weaker global consumption to weigh on the market.”

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