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WTI/RBOB Sink After Big Crude Build, Production Jump Offsets Greatest Gasoline Inventory Draw In History
WTI/RBOB Sink After Big Crude Build, Production Jump Offsets Greatest Gasoline Inventory Draw In History
WTI and RBOB prices are higher this morning following API’s reported the biggest gasoline draw in history (compared to EIA data). Of course, disruptions (Florida demand and Texas supply) remain dominant but DOE reports a massive 8.4mm draw in Gasoline inventories – the biggest draw ever. The reaction in prices is anti-climactic as production rebounded and crude built dramatically to offset the exuberance.
Bloomberg’s Javier Blas reminds readers that the report covers the period from 7:01 am on Friday, Sept. 1 to 7:00 am on Friday, Sept. 8. So a lot of disruption from Harvey (particularly from Sept. 1, 2, and 3) will still impact everything from refining intake to crude production and U.S. imports and exports.
API
- Crude +6.181mm (+4.82mm exp)
- Cushing +1.32mm (+1.6mm exp)
- Gasoline -7.896mm (-1.5mm exp) – biggest draw ever
- Distillates-1.805mm
DOE
- Crude +5.888mm (+4.82mm exp) – biggest build in 6 mos
- Cushing +1.023mm (+1.6mm exp- biggest build in 6 mos
- Gasoline -8.428mm (-1.5mm exp) – biggest draw ever
- Distillates -3.215mm – biggest draw in 6 mos
Bloomberg Intelligence energy analyst Vince Piazza notes that the impact from hurricane season will keep crude demand subdued, with roughly two million barrels of daily refining capacity off-line. Depressed gasoline consumption should persist temporarily on lower transportation use and suppressed refining utilization.
Gasoline inventories confirmed API’s data and saw the biggest draw in history as Crude and Cushing saw major builds…
The bearish data point is that total U.S. petroleum inventories (that’s crude, refined products, propane and the volatile “other oils” category) have built for the second consecutive week.
Total stocks up 1.7 million barrels, driven by big builds in crude, propane and other oils.
…click on the above link to read the rest of the article…
America’s “Soaring” Gasoline And Oil Demand Was Just An Illusion: How The EIA Fooled The Algos
America’s “Soaring” Gasoline And Oil Demand Was Just An Illusion: How The EIA Fooled The Algos
When it comes to “real-time” measurements of crude demand and supply, the data is notoriously bad (and perhaps, according to some, intentionally manipulated). We pointed this out most recently in early March when we that according to IEA data, crude oil production exceeded consumption by an average of 0.9 million barrels per day in 2014 and 2.0 million bpd in 2015. Of this 1 billion barrels which the IEA said was produced but not consumer, some 420 million are said to be stored on land in OECD member countries and another 75 million can be found stored at sea or in transit by tanker somewhere from the oil fields to the refineries. This means that as of this moment, about 550 million “missing barrels” are unaccounted for “apparently produced but not consumed and not visible in the inventory statistics.”
However, it is not only data at the annual level that is flawed: monthly, and especially weekly data is just as, if not even more distorted. In fact, as Bloomberg’s oil energy analyst Julian Lee asks, “could it be that the U.S. demand that’s helped drive a near doubling of oil prices since mid-February was illusory?”
Lee is referring to a major discrepancy in DoE reporting which through the Energy Information Administration, produces two sets of U.S. demand data that drive sentiment and influence trading. The first shows monthly figures. They’re two months out of date, but they give the most accurate assessment of what’s going on in the world’s largest oil-consuming country.
The second set of numbers come out each Wednesday, giving preliminary estimates for the previous week. For crude markets these weekly figures – though less reliable – are arguably more important, largely because they’re bang up to date.
…click on the above link to read the rest of the article…
Wind May Win The Renewable Race – But At What Price?
Wind May Win The Renewable Race – But At What Price?
You only need to drive the long, lonely stretches of highway in west Texas, Kansas, Nebraska, Ohio, Colorado or even parts of California to know that wind farms have become prolific across America. In fact, there are over 48,000 wind turbines spinning their blades in at least 39 states including Alaska, Hawaii and even in Puerto Rico.
The U.S. Department of Energy (DOE) released an Executive Summary on wind last week, including some interesting, but possibly ambitious, projections. According to the DOE, wind has become the fastest-growing source of alternative energy since 2000. In 2008, the report claims, wind provided just 1.5% of the nation’s total electricity needs. That jumped to 4.5-percent by 2013, a number mostly validated by the Energy Information Administration (EIA).
The DOE predicts wind power will jump to 10-percent by the end of the decade, then 20-percent by 2030 and possibly as high as 35-percent by 2050. TheAmerican Wind Energy Association agrees that a 20-percent market penetration is possible in fifteen years. On a global perspective, ExxonMobil, in their 2014 Energy Outlook to 2040 is not quite as optimistic, forecasting that fossil fuels will still provide approximately 70-percent of the world’s energy demand in twenty-five years, with wind and solar combined only generating approximately 4-percent of global demand.
…click on the above link to read the rest of the article…
