Weekly Petroleum Report - 6/3/05

[BoeingBoy]

It's another Wednesday, so here's another weekly petroleum report. As I posted yesterday, Bloomberg's survey of analysts suggested another increase in crude oil stocks would be reported leading to lower crude prices. PineyBob's thoughts on analysts (look at the first 4 letters of analyst) may be correct - stocks fell. We'll see what immediate effect this has on crude spot prices by the time I finish typing this.

So on to what the EIA had to say:

U.S. crude oil refinery inputs averaged nearly 16.1 million barrels per day during the week ending June 3, down 26,000 barrels per day from the previous week's average.

Refineries operated at 94.9 percent of their operable capacity last week.

While refinery inputs were relatively unchanged, gasoline production declined last week, averaging over 9.0 million barrels per day. However, distillate fuel production increased slightly, averaging over 4.2 million barrels per day. [Jet fuel production was up 107,000 bbls/day over last week]

U.S. crude oil imports averaged over 10.2 million barrels per day last week, down 478,000 barrels per day from the previous week.

Over the last four weeks, crude oil imports have averaged over 10.5 million barrels per day, which is 185,000 barrels per day more than averaged over the comparable four weeks last year.

U.S. commercial crude oil inventories (excluding those in the SPR) fell by 3.0 million barrels from the previous week. [This was contrary to forecasts of flat to growing inventories]

At 330.8 million barrels, U.S. crude oil inventories remain well above the upper end of
the average range for this time of year.

Total product supplied over the last four-week period has averaged nearly 20.5 million barrels per day, or 1.3 percent more than averaged over the same period last year.

Over the last four weeks, motor gasoline demand has averaged 9.4 million barrels per day, or 2.4 percent above the same period last year, while distillate fuel demand has averaged 4.1 million barrels per day, or 6.6 percent above the same period last year. Kerosene-type jet fuel demand is up 3.4 percent over the last four weeks compared to the same four-week period last year.

Now for the "nuts and bolts" of spot prices:

Jet fuel spot prices on 6/3/05 (5/27/05) [5/20/05]

NY Harbor $1.6810 ($1.5260) [$1.4327]
Gulf Coast $1.6760 ($1.4998) [$1.41.40]
Los Angeles $1.70 ($1.5800) [$1.5300]

For context, the crude oil spot prices on 6/3/05 (5/27/05) [5/20/05]:

WTI-Cushing $55.08 ($51.65) [$47.25]
Brent $51.90 ($49.42) [$46.91]

As you can see, last Friday marked the recent high point for crude and that translated to jet fuel spot prices.

Finally, current crude prices from Bloomberg as of nearly 11:00 AM (though with the delay these are pre-EIA report priced) and the price in last weeks report at about the same time:

WTI-Cushing $53.30 $54.33
Dated Brent $51.83 $51.59
NYMEX $53.40 $54.40

Prices are down somewhat from yesterday's close (WTI off $0.46, Brent off $0.02, and NYMEX off $0.36)

Finally, since the weekly EIA report is now into June activity we have the May averages, so here are the monthly jet fuel spot prices since the first of the year (NY Harbor, Gulf Coast, Los Angeles)

Jan $1.3987, $1.3341, $1.3083
Feb $1.3798, $1.3342, $1.4460
Mar $1.5899, $1.5621, $1.7149

1st qtr average: $1.4561, $1.4101, $1.4897
US Airways mainline average fuel cost (incl taxes): $1.4720

Apr $1.5836, $1.5728, $1.7980
May $1.4843, $1.4714, $1.5863

2nd qtr average thru May: $1.5340, $1.5221, $1.6922

Unless jet fuel comes down significantly, we're on track to spend roughly 7-10% more on fuel than in the 1st quarter.

Jim

PS - as I've finished typing this, NYMEX crude has reversed the earlier decling and is now trading at $54.70, up $0.94 from yesterday's close.

 

[MrAeroMan]

In August the Strategic Petroleum Reserves will be completely full freeing up around 75,000 bpd. There is an article in the Charlotte Observer about this and it's effect on the price of crude. Ultimately this could free up to 150,000 bpd in additional oil (75,000 bpd) and additional consumption (75,000 bpd less in demand) and might put downward pressure on oil prices. I think they're already buying oil futures for August delivery so if the decrease in price is going to happen it should happen fairly soon at least in the futures market.

 

[RowUnderDCA]

eh... closed down dollar and a quarter... go figure.

 

[SpinDoc]

eh... closed down dollar and a quarter... go figure.

[post="276071"][/post]​

Does anyone on this forum have the kind of
access needed to write a report that will
sway the momentum of the futures market
to force prices down? That is what is needed
right now, a major report from a financial
advisor that scares futures investors into
selling their contracts, thereby forcing the
cost of oil down to lower levels. We all know
that the current futures investors are a
bunch of greedy pigs looking to make a
killing by keeping the price of oil
artificially high, so if public opinion can
be changed with reporting information,
then somenoe should write a report.

 

[BoeingBoy]

eh... closed down dollar and a quarter... go figure.

[post="276071"][/post]​

Here's what the prices were as I wrote last Wednesday's report:

WTI-Cushing $53.30
Dated Brent $51.83
NYMEX $53.40

[post="276032"][/post]​

And here are Friday's closing prices:

WTI-Cushing $53.54
Dated Brent $51.58
NYMEX $53.54

Crude seems to have ended the week within a few cents of where it was just before the weekly EIA report was issued.

Jim

 

[autofixer]

With all of the wild fluctuations in price, it almost looks like oil is hitting a "classic" top.

 

[BoeingBoy]

Or the "pipeline" - everything between the well and the pump - is stretched so tight that the slightest news (either good or bad) sends the markets into a tizzy....

I don't usually mention anything about the IEA reports in my weekly postings because they only issue a report monthly and their full current data is only available to paid subscribers, but here's a tidbit -

1Q05 world crude oil supply: 83.8 million bbls/day

1Q05 world crude oil demand: 84.3 million bbls/day

Jim

 

[BoeingBoy]

In advance of this week's OPEC meeting - where it is expected that production quotas will be increased by 500,000 bbls/day - oil prices rose to the highest in 7 weeks today.

According to Bloomberg:

WTI Cushing closed at $55.62/bbl, up $2.08
NYMEX closed at $55.62 but has dropped $0.08 cents in aftermarket trading.

Jim

 

[jimntx]

In advance of this week's OPEC meeting - where it is expected that production quotas will be increased by 500,000 bbls/day - oil prices rose to the highest in 7 weeks today.

According to Bloomberg:

WTI Cushing closed at $55.62/bbl, up $2.08
NYMEX closed at $55.62 but has dropped $0.08 cents in aftermarket trading.

Jim

[post="276998"][/post]​

You and Bloomberg must be lying! I have it otherwise from an unimpeachable
source...

Today Crude Oil futures traded at $49.20 per barrel down $2.57 or about 5 percent. This is the first closing price below $50 per barrel in about two months.

In my opinion, with the Futures price dropping below the key psychological support level of $50 there could be a market sentiment shift to “bearishâ€￾. Moreover, the security had significant technical damage, which could also lead to lower prices as speculators and technical analysts lock in profits.

Fundamentals seem to support lower prices too, and I believe we could see crude oil futures drop to about $45 per barrel in the not-so-distant future.

 

[BoeingBoy]

In advance of tomorrow's weekly EIA report and OPEC meeting, crude drifted lower today. According to Bloomberg, closing prices were $55.00/bbl for both WTI and NYMEX.

Jim