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U.S. Oil Imports Decline; Crude Inventories tumble;

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Crude Reserves

Observing the U.S. crude reserves, they had the biggest one-week fall down since December. It happened last week as imports fell down roughly. Furthermore, inventories of refined products also declined. Helping aliment of oil prices that were down by worries about oversupply.

Crude inventories USOILC=ECI fell 5.2 million barrels in the week to May 5. EIA data showed, rather compared with expectations for a decrease of 1.8 million barrels.  Crude stocks were the lowest since February. Leveling at 522.5 million barrels.

Regarding U.S. crude imports USOICI=ECI, they dropped in previous week by 799,000 barrels per day. Which makes it the largest weekly drop since the middle of February. It came to just 6.9 million bpd. Since the beginning of March, it’s happening for the first time that they have been below 7 million bpd.

Stocks at the Cushing, Oklahoma, conveyance center for U.S. crude futures USOICC=ECI went down to 438,000 barrels.

 

OPEC; Non-OPEC

Speaking about Crude futures, they rose. Based on the data which came after overpassing weeks of pressure.. Mostly over worries that a deal between OPEC and non-OPEC producers about cutting the outputs may not have expected effect. And was not having the desired impact on market prices.

By 11:12 a.m., U.S. crude futures CLc1 were up $1.30, or 2.8 percent, at $47.18 a barrel, and Brent crude LCOc1 rose 2.5 percent, or $1.25, to $49.98 a barrel. (Reuters)

However, U.S. production went up again, and refining runs declined. This made and effect of giving the analysts a pause. They didn’t have to worry about the market’s brisk increase.

 

Forecasts

“The highlited crude oil drawdown number is doubtless supportive. However, it could act something like a shooting star.

The refinery usage-rate has come pretty down. Due to moments after topping out, a couple of weeks ago.” (John Kilduff)

Refinery crude runs USOICR=ECI were down 418,000 bpd. Their utilization rates USOIRU=ECI declined by 1.8 percentage points to 91.5 percent of overall capacity. Happening right after hitting a record 94.1 percent  in the period of three weeks earlier. This is all based on EIA data.

Gasoline stocks USOILG=ECI fell 150,000 barrels.

Distillate stockpiles USOILD=ECI, they also include diesel and heating oil. It has dropped 1.6 million barrels. In comparison with expectations for a 1.0 million-barrel draw.

Notably, U.S. crude production continued to bloom, rising to 9.31 million bpd. While only a week earlier it came from 9.29 million bpd.

 

Outputs still growing

“Growing oil output in the U.S., which achieved its highest level since August 2015, will remain a spiny sharp issue for price bulls.”  Abhishek Kumar was commenting this subject.

He is a senior energy analyst at Interfax Energy’s Global Gas Analytics in London.(Reuters)

U.S. Oil outputs are making a fuss with global Oil supplies and Oil prices. Will OPEC countries succeed in cuts and market rebalance, only time will show.

 

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Oil prices lower every day; OPEC’s effective and efficient decisions needed

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Today, it was a day of 5-month lows in Oil prices. This happened because of bothers on OPEC glut, and whether it would be extended. Nevertheless promises from Saudi Arabia about Russia’s preparation to join OPEC’s future cuts.

 

Low Prices of Oil

U.S. West Texas Intermediate crude oil futures  were more than 3 percent down in early trading. They came to a price of less than $44 a barrel. Which makes it the lowest since Nov 14. Yesterday, oil was down for 4 percent.

Brent Crude also went down for 3%. It went to a price less than $47. The lowest since november the 30th. The 30th of November was the date when OPEC activated a price rally. The day they announced that the output cuts are to start in the first half of 2017.

Trade losses

Both landmarks sleeked losses to trade near Thursday’s close by 1320 GMT. “OPEC and non-OPEC nations were really near to agreeing a deal on supply cuts.” said Adeeb Al-Aama, Saudi’s OPEC Governor.

  • “Based on today’s data, there’s a growing conviction that a six-month extension may be needed to rebalance the market, but the length of the extension is not firm yet.”

Deeper cut is not so likely. Speculations say that OPEC indeed will extend the cuts on May 25th. But the question is what is initially good about this. The 1017 has and will have 1.8 million bpd. That is the agreement which OPEC countries made in the beginning.

Hedge funds had speeded up decrease of their long positions. Thursday was a day when Brent crude trading volumes came to a record high. Counting about 542,000 contracts.

Pierre Andurand is the official in one of the worlds largest funds specialising in oil. He busted up his fund’s last long positions in oil last week. He is now running a very reduced risk at the moment.

“It is now-or-never for oil bulls,” said U.S. commodity analysis firm The Schork Report. They either put up a defense here or risk further emboldening the bears for a run at the $40 threshold (for WTI).” (Reuters)

 

Brend And WTI Futures

Both Brent and WTI futures are down about 17 percent so far this year despite OPEC efforts to support prices. The benchmarks are trading around levels last seen before the joint deal to cut output was first announced.

“So far OPEC’s strategy to draw down inventories has not worked.” (Neil Beveridge)

” If their strategy is to have any chance of success.. It is evident to us that OPEC will need to keep the output cuts active way more than the next six months. ”

Adding to cares about protruding inventories, traders pointed to exalted U.S. oil output. It is up more than 10 percent since mid-2016 to 9.3 million bpd. Which makes it almost matching output of top producers Russia and Saudi Arabia.

“Any likelihood of an increase in the level of cuts remains slim with OPEC officials playing down this possibility.” said James Woods, global investment analyst at Rivkin Securities. (Reuters)

 

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Oil immerses, on U.S. stock decline

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Oil prices tumbled lower today, May 3. Right after the U.S. government data showed a smaller-than-expected decline in domestic crude inventories. There was also shown a weak demand for gasoline. And it is feeding bothers about a supply glut.

 

Oil Numbers & Data

Benchmark Brent crude LCOc1 was down 8 cents at $50.38 a barrel.

U.S. West Texas Intermediate (WTI) crude CLc1 was down 18 cents at $47.48 a barrel at 11:33 EST.

Weekly crude stocks fell by 930,000 barrels to 527.8 million. Which makes it less than half the 2.3 million-barrel draw that had been in forecast. (EIA)

“U.S. domestic production increased again, and continues its steady climb.” said John Kilduff. (Again Capital hedge fund partner in New York.)

Noteworthy, sharp drop in imports turned what would have been an increase in stocks into a small drawdown.

EIA data also showed gasoline stocks rose by 191,000 barrels, which was much less than the 1.3 million-barrel gain that had been forecast. However, gasoline demand slipped 2.7 percent over the last four weeks from the same period a year ago.

  • “This is continuing a trend since the beginning of the year in which sales have been lower and that is casting a shadow on the market and pressuring crude oil prices.” Andrew Lipow, president of Lipow Oil Associates in Houston. (Reuters)

While the market remains anchored on U.S. production, oil investors continue to watch.. And think whether producing countries have been complying with their 2016 deal to cut output around 1.8 million bpd by the middle of the year.

 

Russia’s position

 

Russia’s oil cut exceeds level demanded in OPEC-led pact. Under the deal, Russia promised to cut its average daily production gradually by 300,000 barrels to 10.947 million bpd. From the October level of 11.247 million bpd.

With global crude inventories still bulging, investors are now focused on whether OPEC and others will agree to extend the cuts to the second half of the year. This will most probably become true on May 25th.

Russia, contributing the largest production cut outside OPEC, said that as of May 1, it had curbed output by more than 300,000 bpd. Since hitting peak production in October.

Russia has achieved its reduction target a month ahead of schedule. OPEC production showed the group’s compliance had fallen slightly.

Alexander Novak, Russian Energy Minister has said he would meet managers of key Russian oil producer before the OPEC event. He wants them to discuss extending the cuts. That meeting has yet to take place.

Russia’s Deputy Prime Minister Arkady Dvorkovich refused to comment about this subject when asked today.

 

More Oil from East

 

  • “Although OPEC is expected to extend a self-imposed output cap by another six months, it would be a challenge convincing several non-OPEC members to join the endeavor.” Said Abhishek Kumar, senior energy analyst at Interfax Energy’s Global Gas Analytics in London. (Reuters)

According to some news by Reuters it is clear that there was more oil from Angola and higher UAE output than originally. Thought meant OPEC compliance with its production-cutting deal slipped to 90 percent in April. From a revised 92 percent in March. Certainly, there are a lot of manipulations happening in the Oil market. Will it come out stronger after the May 25… We will see.

 

 

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