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Oil Continues To Plunge As Markets Turn Bearish
Oil prices fell again on Friday, endorsed by a stronger dollar and persisting fears of both a crude and refined products glut. (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) (Click to enlarge) Friday, July 22, 2016 Oil is set to close out the week with a loss as worries over a glut of refined product inventories persist. The EIA did nothing to dispel those concerns this week, reporting another uptick in gasoline stocks, the fourth increase in five weeks. Those gains in inventories come even as June saw record gasoline demand in the U.S. as motorists failed to put a dent in the high levels of supply. Gasoline stocks ended June at their highest level since 1984 for the time of year. “The narrative of a balanced oil market (in the second half of 2016) has so far been an illusion,” […]
Expert Commentary: Bloated Inventories Keep Oil Prices Capped
• WTI consolidated near the $45 mark this week and achieved just a $2.40 range from Monday through Thursday as Summer Doldrums took effect. News flow and volumes were light with most of the usual suspects (FX, Nigeria, Libya and crude + product gluts) driving small, tired looking moves which never really gained momentum with the exception of Wednesday’s $43.69 print for a two-month low. We continue to see a range bound market for the near term feeling neither strongly bullish nor bearish about $45 oil. On a longer horizon we also continue to feel that an FX + gasoline driven move below $40 would invite significant speculative length into the market and likely be good buying opportunity for flat price and WTI Z16/Z17. • On the bearish side bloated products stocks on a global level, abysmal refining margins, lackluster refiner inputs, more evidence of ‘flattening’ U.S. output via […]
The Reported Death of Peak Oil Has Been Greatly Exaggerated
I have attempted to correct the reported Texas output using the methodology provided by Dean. Usually Dean provides the spreadsheets and I simply reproduce his charts with a few comments. This month Dean may be on vacation or busy and I have not yet received his input. If I get his charts I will post them. Dean uses the average of the correction factors from Jan 2014 to the present in order to reduce the month to month volatility of the correction factors. I tried several averaging methods (all data, 12 month average, 6 month average, and 3 month average) where for the x month average the most recent x months of correction factors were averaged. The only method with a significant difference was the 3 month average, so I present the “corrected” output using Dean’s usual method and an “Alt (3 month)” alternative. The RRC […]
Peak Oil Redux
Peak conventional crude petroleum oil production is apparently here already – the only thing that’s been growing global total liquids is North American unconventional oils : tight oil – which includes shale oil in the United States of America – and tar sands oil from bitumen in Canada – either refined into synthetic crude, or blended with other oils – both heavy and light. But there’s a problem with unconventional oils – or rather several – but the key one is the commodity price of oil, which has been low for many months, and has caused unconventional oil producers to rein in their operations. It’s hitting conventional producers too. A quick check of Section 3 “Oil data : upstream” in OPEC’s 2016 Annual Statistical Bulletin shows a worrying number of negative 2014 to 2015 change values – for example “Active rigs by country”, “Wells completed in OPEC Members”, and […]
Next Week Is as Good as It Gets for Big Oil
Several majors expected to post highest earnings in 3 quarters Strong performance may not last as oil seen easing back to $40 For oil companies, the second quarter might be as good as it gets. Shares gained more than in any other industry, thanks to crude rising from a 12-year low. Profits were the best in at least three quarters for majors including Royal Dutch Shell Plc, Chevron Corp. and BP Plc, helped by cost cuts, analysts say. The rest of the year might not be as rosy as supply holds near record levels. The combined market value of the world’s oil companies shrank by $2 trillion in the past two years following crude’s collapse. While analysts agree the worst of the oversupply is over, BNP Paribas SA and JBC Energy GmbH are among those forecasting a slide back to $40 a barrel as output rebounds in Canada, Iran, […]
