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Remember When We Were Running Out of Crude Oil Storage?

Given the amount of air time the crude oil storage situation received back in March and April, this might be a good time to revisit that situation. If you recall, there was a great amount of hand-wringing regarding the crude oil storage picture in the U.S. Inventories were high and they were continuing to rise. There were a great many articles like this one, which assured us the situation was dire: US running out of room to store oil; price collapse next? “The U.S. has so much crude that it is running out of places to put it, and that could drive oil and gasoline prices even lower in the coming months. For the past seven weeks, the United States has been producing and importing an average of 1 million more barrels of oil every day than it is consuming. That extra crude is flowing into storage tanks, especially […]

Posted On : Published By : Tom Whipple
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Ruble Heads for Weekly Slide on Oil Before Fitch Rating Decision

The ruble fell as the biggest weekly drop in oil prices in almost three months outweighed optimism Fitch Ratings will retain Russia’s only investment-grade rating. The currency weakened 0.5 percent to 55.824 per dollar as of 5:49 p.m. in Moscow, heading for a weekly decline of 1.9 percent. Brent crude retreated 1.1 percent, poised for a 3 percent decrease in the last five days. Government bonds, known as OFZs, slid. The Russian currency has dropped 12 percent since May 18 as the central bank bought foreign exchange to replenish its reserves, adding to the impact of interest-rate cuts this year. Fitch is the only one among the three major rating companies to keep Russia at investment grade. Finance Minister Anton Siluanov said July 2 he doesn’t expect the agency to revise that rating on Friday. “Nobody is counting on the Fitch downgrade at the moment, so if it happens, […]

Posted On : Published By : Tom Whipple
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French Oil Strike Fizzles in Sign Jobs Worries Damping Militancy

A labor union that orchestrated a complete shutdown of France’s refineries in 2010 failed to gain support for a nationwide strike at oil plants this week in a sign its influence is waning. The Confederation Generale du Travail had called for a walkout at refineries, oil depots and import terminals to protest against a plan by Total SA to halt crude processing at La Mede plant in southern France. There was no labor action Thursday at refineries other than La Mede, where a three-week strike has idled operations, Total said. “The CGT is losing ground in its traditional bastions of power like energy and chemicals,” Bernard Vivier, director of Paris-based researcher the Higher Institute of Labor , said in an interview. “France’s social climate isn’t one of revolt these days but rather of resignation.” The CGT, one of half a dozen unions representing oil workers in France, is protesting […]

Posted On : Published By : Tom Whipple
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Oil Oversupply Meets Rising Demand in Quietest Market Since 2013

Quietest Oil Market Since 2013 The sleepiest oil market since 2013 will probably limp through the second half of the year as well. Crude traded in a $5 range in June, the narrowest in 19 months. Volume was the lowest since December and open interest – – the number of futures contracts outstanding — was the least since January. New York-traded futures, which have swirled around $60 a barrel for the past two months, will average about $59 in third quarter and $63 in the fourth, according to forecasts of 22 analysts compiled by Bloomberg. Neither the potential return of Iranian crude to the market nor the long-anticipated decline in U.S. production is stirring a reaction. While gasoline demand has increased faster than projected, keeping the oil glut from growing, record production from OPEC’s biggest members and potential for a quick increase in U.S. shale output have capped a […]

Posted On : Published By : Tom Whipple
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Oil Drops as U.S. Shale Shows Resilience; Greece, Iran in Focus

By Eric Yep Crude-oil futures fell in Asian trade Friday, with Nymex crude trading at its lowest level in more than two months, dragged lower by concerns over resilient U.S. shale production in the face of low oil prices and high OPEC production. On the New York Mercantile Exchange, light, sweet crude futures for delivery in August traded at $56.66 a barrel at 0331 GMT, down $0.27 in the Globex electronic session. August Brent crude on London’s ICE Futures exchange fell $0.18 to $61.89 a barrel. The U.S. oil-rig count rose by 12 to 640 the past week, snapping 29 straight weeks of decline, Baker Hughes data showed. This raised concerns U.S. shale-oil production could remain strong and continue to pressure oil prices. Though U.S. oil production continues to rise and contribute to the global surplus, rising output from the Organization of the Petroleum Exporting Countries is an even […]

Posted On : Published By : Tom Whipple
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Oil Heads for Biggest Weekly Drop Since March as Rig Count Rises

Oil headed for the biggest weekly decline since March as a rebound in U.S. drilling added to signs that producers will keep pumping into an oversupplied market. Futures in New York fell for a third day, extending this week’s decline to 5.2 percent. The number of active rigs seeking oil climbed by 12 to 640, the first gain since December, according to data from Baker Hughes Inc. Iran said it recognizes the right of United Nations monitors to seek visits to sensitive sites , as diplomats work on a nuclear agreement that could restore the OPEC member’s crude exports. Oil’s recovery from a six-year low in March has faltered amid speculation that rising prices will spur production and prolong a surplus. OPEC’s output expanded last month to the highest level since August 2012 as Iraq pumps at a record pace, a Bloomberg survey showed this week. “The rig count […]

Posted On : Published By : Tom Whipple
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NYMEX August gas settles at $2.822/MMBtu, up 3.9 cents

The NYMEX August natural gas futures contract climbed 3.9 cents to settle at $2.822/MMBtu as the market reacted to the US Energy Information Administration’s weekly gas storage report that was toward the low end of analysts’ expectations. The contract traded as high as $2.885/MMBtu before pulling back toward the end of trading. The EIA estimated an injection of 69 Bcf for the week ended June 26, which was toward the low end of expectations of analysts surveyed by Platts, who expected an injection between 68 Bcf and 72 Bcf. The injection was well below the 102-Bcf injection reported for the same week last year and the 75-Bcf five-year average injection. "If summer temperatures can continue at these elevated levels, we could see another [demand-led] rally. However, if the climate succumbs to the super El Nino that has developed, we can expect a swift drop and the potential for triple-digit […]

Posted On : Published By : Tom Whipple
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Oil Nearly Erases Gains After Rig Count Grows

By Timothy Puko Oil prices fell back nearly to unchanged, erasing almost 1.7% in gains on the day, after the U.S. oil-rig count rose for the first time in seven months. U.S. oil producers added 12 rigs last week, breaking 29 straight weeks of cuts. They are responding to prices that have rebound to and stayed at $60 a barrel and since late April. That convinced producers they could end months of massive cutbacks that started after the U.S. shale drilling boom flooded the market and sent prices crashing. But oil production has kept increasing even as drilling has been decreasing, making many investors fearful that more rigs in the fields could lead to another precipitous decline in prices. The U.S. benchmark price just yesterday broke below a $4 range it had traded in for two months. That jolt came after the U.S. Energy Information Administration reported domestic oil […]

Posted On : Published By : Tom Whipple
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Oil Falters After Rig Count Grows

The amount of rigs drilling for oil in the U.S. rose for the first time in seven months, triggering a slump in crude oil prices to their lowest settlement in two months. U.S. oil producers added 12 rigs last week , breaking 29 straight weeks of cuts, in response to prices that have rebound to- and stayed at $60 a barrel since late April. That convinced producers to end months of massive cutbacks that started after the U.S. shale drilling boom flooded the market and sent prices crashing. But the increase in rigs is scaring investors and analysts who have warned that oil could be on the verge of another sharp fall. Production has kept making small gains even as drilling has declined and stockpiles have hit historic levels around the world. If rigs get back to work, that could keep the market flooded with oil, a concern that […]

Posted On : Published By : Tom Whipple
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Natural Gas Gets Boost From Another Low Weekly Storage Addition

By Timothy Puko Natural gas prices rose Thursday after another sign the market’s longstanding oversupply may be relenting. The U.S. Energy Information Administration said producers made a lower-than-normal addition to storage for a second-straight week. Storage levels grew by 69 billion cubic feet in the week ended June 26, 2 bcf less than the average of forecaster surveyed by The Wall Street Journal and 6-bcf lower than the average addition for this week of the year. Prices for the front-month August contract settled up 3.9 cents, or 1.4%, to $2.822 a million British thermal units on the New York Mercantile Exchange. Prices pared gains in the afternoon and ended the day firmly in the 17-cent range they have settled in for the past three weeks. The EIA update is widely considered one of the best measures of supply and demand for the natural gas market. When a stockpile addition […]

Posted On : Published By : Tom Whipple