Weekly Petroleum Status Report 6/15/05

[BoeingBoy]

Apparently, OPEC increase in production quotas didn't do much for the markets - at least so far. But first, the weekly EIA report....

U.S. crude oil refinery inputs averaged over 16.3 million barrels per day during the week ending June 10, up 281,000 barrels per day from the previous week's average.

Refineries operated at 96.7 percent of their operable capacity last week.

Although refinery inputs increased significantly, gasoline production declined last week, averaging nearly 9.0 million barrels per day. However, distillate fuel production increased substantially, averaging 4.4 million barrels per day, the largest weekly average ever.

U.S. crude oil imports averaged over 10.6 million barrels per day last week, up 397,000 barrels per day from the previous week. Over the last four weeks, crude oil imports have averaged nearly 10.5 million barrels per day, which is 80,000 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 1.8 million barrels from the previous week. At 329.0 million barrels, U.S. crude oil inventories remain well above the upper end of the average range for this time of year.

Total motor gasoline inventories declined by 0.9 million barrels last week, putting them in the upper half of the average range. Distillate fuel inventories climbed by 2.5 million barrels last week, but remain in the lower half of the average range for this time of year.

Total commercial petroleum inventories rose by 2.8 million barrels last week, putting them above 1 billion barrels for the first time since the week ending September 20, 2002.

Total product supplied over the last four-week period has averaged nearly 20.7 million barrels per day, or 2.0 percent more than averaged over the same period last year.

Kerosene-type jet fuel demand is up 4.6 percent over the last four weeks compared to the same four-week period last year.

Spot prices for jet fuel on 6/10/05 (6/3/05):

New York Harbor $1.6865 ($1.6810)
Gulf Coast $1.6515 ($1.6760)
Los Angeles $1.7250 ($1.7000)

Spot prices for crude on 6/10/05 (6/3/05):

WTI Cushing $53.55 ($55.08)
Brent $51.98 ($51.90)

Current crude prices (at noonish) per Bloomberg:

WTI Cushing $56.35
Dated Brent $54.05
NYMEX $56.30

As I mentioned at the start, the OPEC production quota increase hasn't had the effect of lowering prices so far. From reading various analyst's remarks, there seems to be 3 primary reasons:

- OPEC is already producing in excess of the official quotas

- OPEC is already producing nearly all it can

- Any additional production is likely to be "heavy sour" crude which is unattractive to refiners due to the higher cost of refining.

These quotes seems to sum up much of the analyst sentiment:

"There appears to be nothing that can assuage the market about supply fears in the second half of the year,'' said John Kilduff, vice president of risk management at Fimat USA in New York. "Crude-oil inventory declines and any bullish news are going to be the focus. There is a lack of additional OPEC capacity so there is no room for error.''

"The last thing I'd be in this market would be short,'' said Boone Pickens, the Dallas hedge fund manager and former oil executive. Any additional OPEC supply will be "undesirable oil that refineries won't want. It's unlikely that kind of oil will even go into the market.''

Jim

 

[repeet]

Oil Jumps Above $58 as Demand May Outpace Production Growth

``There is no question that the market is going to $60,'' said Kyle Cooper, an analyst with Citigroup Inc. in Houston. ``There is a lot of fear and hype about the possibility of us running out of oil, and it has stuck.''

`Going over $60 will require a catalyst,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``A major event such as a hurricane, massive crude-oil inventory draw, or destabilizing geopolitical event will be needed.''

Crude-oil prices are likely to reach $70 barrel once they breach the record, said John Murphy, chief technical analyst at StockCharts.com. Oil futures in New York have exceeded the 200- day moving average since a dip in May. That suggests a 70 percent to 80 percent chance of oil's reaching $70, said Murphy.

 

[usair_begins_with_u]

I wonder if HP/US worked $70 bbl into their new high profitablity model.

 

[markkus757]

I wonder how A320's crow tastes right about now? This is slowly becoming a national emergency, let alone an emergency for our industry.

 

[SpinDoc]

I wonder how A320's crow tastes right about now?  This is slowly becoming a national emergency, let alone an emergency for our industry.

[post="277621"][/post]​

How many times have I said it. The speculators in
the oil futures markets need to be senslessly beaten
for their part in this oil bubble.

They are all trading on the fear that the producers
are going to cut production, or that terrorists are
going to sabotage oil supplies in the Middle East.
Guess what, it's time to get over this rationale.
If anyone conducts a mass scale sabotage of
oil supplies, they will be nuked back to the
stone age.

Ed-mod.

 

[700UW]

Your insults at a race of people and your thinking of nuking people clearly shows you have some issues.

 

[SpinDoc]

Your insults at a race of people and your thinking of nuking people clearly shows you have some issues.

[post="277824"][/post]​

Why yes. I do have issues with the people who conducted
the terrorist attacks on 9-11, and continue to try to F***
with us any time they get the chance by destabilizing
oil production and prices, or at least causing the speculation
that is going on the futures market. They need to be
nuked. Period.

Face it, 9-11 destroyed any semblance of a normal life
for many people at US and other airlines, and the acts
were planned and committed by Middle Eastern men.
So WHO do you think I am going to attack? White,
females from North America? Enough said,

 

[700UW]

Lets see the first terrorist attack on the United States was done by white men in Oklahoma City, not middle eastern men and you are stereotyping.

The first group of men to kill in the name of religion were white anglo saxons, guess you forgot about the crusades.

And the true reason for oil going up is being done by the industry, no one is disrupting the flow of oil from Saudi Arabia, Nigeria, Kuwait, Mexico or any other OPEC nation, except for Iraq, whos oil the US does not depend on.

A refinery has not been built in over 20 years.

But like I said don't let the facts get in your racist ways of thinking.

There are plenty of good Islamic people in this world and plenty of bad white anglo saxons, you are prejudiced.

 

[BoeingBoy]

Both NYMEX & WTI closed at $59.37/bbl today. NYMEX has dropped $0.35 as of 8:22pm according to Bloomberg. Wonder how the POR, due in 10 days, is coming along......

Jim

 

[BoeingBoy]

So far it seems that crude is holding above $59/bbl today. While it may change as the day progresses, it seems like without other news to affect prices the traders are waiting for tomorrow's weekly EIA report. Bloomberg expects it to show an increase in distillate fuel stocks (heating oil & diesel) which could ease concerns about supplies for later this year and lead to lower prices.

On a somewhat related note, I've done a little ciphering with the EIA data for average jet fuel spot prices this year and here are the results:

Delivery point...1Q05.....Apr05....May05.....Jun05*
NY Harbor..... $1.4861 $1.5836 $1.4843 $1.6805
Gulf Coast.... $1.4400 $1.5728 $1.4714 $1.6474
Los Angeles. $1.5228 $1.7980 $1.5863 $1.7095

*Jun05 is for the 1st 14 days of the month

Jim

 

[BoeingBoy]

One last update before the EIA weekly report comes out tomorrow (Wednesday).....

Crude closed under $59/bbl today - both NYMEX & WTI at $58.90. NYMEX has drifted up slightly in after-hours trading, as Blookberg shows $58.98 @ 10:22 EDST.

On another note, and just for SpinDoc, I've found someone who agrees that oil is too expensive - at least in the somewhat longer term. Cambridge Energy Research, headed by Daniel Yergin (a Nobel prize winner for his book "The Prize: The Epic Quest for Oil, Money & Power"), forecasts plentiful crude supplies due to increased production within the next 5 years.

See Bloomberg Article

Jim