Wednesday – Oil Inventory Preview

46 thoughts on “Wednesday – Oil Inventory Preview”

1. By Lananh Nguyen
   Of DOW JONES NEWSWIRES

   LONDON (Dow Jones)–Crude oil futures rose more than $1 Wednesday in London,
   lifted by supportive supply data and renewed investor interest.
   Prices were underpinned by American Petroleum Institute figures released late
   Tuesday showing a larger-than-expected, 6.8-million-barrel fall in U.S. crude
   oil inventories, while gasoline and distillate inventories rose by less than
   expected.
   The gains also reflected fresh buying interest from investors building up long
   positions for the third quarter, participants said.
   At 1121GMT, the front-month August Brent contract on London’s ICE futures
   exchange was up $1.35 at $70.65 a barrel.
   The front-month August contract on the New York Mercantile Exchange was
   trading $1.23 higher at $71.12 a barrel.
   The ICE’s gasoil contract for July delivery was up $10 at $567 a metric ton,
   while Nymex gasoline for August delivery was up 307 points at 193.27 cents a
   gallon.
   While oil prices surged in reaction to the API data, participants were
   awaiting U.S. Energy Information Administration data due at 1430 GMT Wednesday
   for a clearer picture of fundamentals, which they said would determine future
   price direction.
   “If Wednesday’s EIA numbers shadow the API, oil prices could stage another
   spike toward Tuesday’s highs,” said Edward Meir, an analyst at MF Global in New
   York.
   However, a “larger-than-expected build in U.S. gasoline stockpiles from the
   EIA today could well send the market to the bottom of the range,” said Andrey
   Kryuchenkov, vice president of commodities research at VTB Capital in London.
   Analysts surveyed by Dow Jones Newswires forecast the EIA would report a 2.1
   million barrel decline in crude stocks, a 1.9 million barrel build in gasoline
   inventories and a 1.6 million barrel rise in distillate supplies.
   Despite oil’s rally from mid-April, fundamentals remain shaky.
   “Beyond the technical support arising from equities, FX [foreign exchange] and
   an expanding money supply, the fundamentals in crude oil market look fragile,”
   said Francisco Blanch, head of global commodities research at Bank of America
   Merrill Lynch in London.
   “Anyway you cut it, demand is extremely weak and total OECD crude and
   petroleum stocks are at exceptionally high levels…more importantly, our
   latest estimates suggest that OPEC compliance is easing to 70%, suggesting that
   OPEC production exceeds quotas by about 1.4 million barrels a day,” Blanch
   said.
   Oil’s downward corrections in recent days have diminished the upward price
   trend from mid-April, and participants are watching technical charts to see if
   the price surge can continue.
   “While better-than-expected data this week could help propel crude prices to
   the $75 a barrel area, technical charts still show the potential for declines
   toward $67.25 and $64.20 area retracements,” said analysts at Sucden Financial.
   The oil market is also looking ahead to key U.S. macro-economic data Thursday
   to discern its effect on broader financial markets, said Marius Paun, a broker
   at ODL Securities in London.
   “Today’s market reaction to the EIA stats could provide a helpful indication
   for the next direction in crude although Thursday’s US non-farm payrolls]
   employment report is what everybody’s after,” Paun said.
   -By Lananh Nguyen, Dow Jones Newswires
   Dow Jones Newswires
   07-01-09 0736ET

2. VLO seems to be finding some footing in here-up a little last few days.

3. I guess everyone but everyone is on vacation today. Nice open, good across the board green with an early pullback that the bulls have fought off.

   The ADP numbers stunk but API and a bullish tone on the Street (as CNBC parades a lot of people in front of the camera saying things aren’t so bad) is helping the group move higher.

   XCO looking to move on up now, HK breaking through previous worry ranges now and EOG looking like it wants to get back up into the $70s as oil looks comfortable here. Not much of the price action means much before EIA today and then, you have to be concerned about unemployement tomorrow.

4. Choices – did you see the link at the end of the post? It may be telling that the stocks failed to tank on Goldman taking most of the rest of the refining group to sell yesterday (they already had VLO there).

5. XCO raised to Buy at Canaccord … to little effect I might add. Still waiting to see GS pound the table post deal here.

6. Z-Saw it-thanks-S &P also reitereates a buy on VLO but cannot find the link.

7. Seems to be a lot of green in energy-land.

   Did I miss something?

8. For those who are serious this day:

   http://screencast.com/t/whjmYQ8C

9. Dman – green market plus strong API last night. Stocks seem to be pretty skeptical until we get EIA though, big morning gains mostly sold back now. Gasoline headline number will be key to rest of week, that and unemployment tomorrow. Stocks are trading at levels from two months ago, whereas oil is up another $20 since then.

10. Wyoming – No doubt an SLB hand.

11. Welcome to July, where everyday feels like Friday afternoon on expiration. Ugh boring.

    EIA in 20 minutes.

12. Wyo check your email.

13. re #7- European and Chinese PMI better last night also helping crude

14. Nifkin – true enough, thanks, those may be helping the broad market too.

    Dollar cratering now, down 0.75% at 79.545, not far from the edge of the abyss.

    WRES ticking up by the way at $2.54. Positive EIA number could go ahead and break that chart out.

15. EIA Oil Inventory Report

    Crude: down 3.7 mm barrels
    Gasoline: up 2.3
    Distillates: up 2.9

    Utilization: 87% flattish
    Imports: 9.4 mm bopd, middle of the road, a little low, inching up last few weeks.

    Gasoline demand: 9.053 mm bpd, lousy.

    Distillate demand: 3.257 mm bpd, even worse.

    oil just before the report: up $1.90 at $71.79

16. Re 15 – In a nutshell, not a great report as products built by larger than expected margins as they both faced persistently poor demand. I’m surprised we didn’t see a “stocking effect” in the gasoline demand numbers and I’d bet we see an uptick here next week.

    Oil not tanking but clearly not pleased by the product numbers. Oil likely to move with the broad market rest of day but has the potential to sell down a bit now on the numbers. If the broad market loses momentum later today I would expect oil to give back all of the overnight gains.

17. Crude up 36 cents now, RBOB and HO both off slightly.

18. It is a slow day:

    http://gawker.com/5305089/cnbc-host-driven-to-cursing-freak+out-by-bloggers

    Where do they find these guys?

19. * Deutsche Bank ups average 2009 oil forecast to $64 vs $47
    * Average 2010 U.S. crude oil estimate unchanged at $55

    LONDON, July 1 (Reuters) – Deutsche Bank raised its average
    2009 U.S. crude oil price forecast to around $64 a barrel, from
    $47 a barrel this week, although it expects prices to fall again
    next year.
    “We believe underlying fundamentals of supply and demand in
    the oil market remain weak,” the bank said in a research note.
    “However, we believe commodities in general and oil in
    particular have benefited from a combination of macro forces
    including rising equity markets, a weakening in the US dollar
    and a resurgent flow of funds into commodities.”
    Deutsche Bank thinks oil prices are likely to average $75 in
    the second half of this year but expects the rally to run out of
    steam. It forecasts an average oil price of $55 in 2010 and then
    a jump to an average of $80 in 2011.
    (Reporting by Joe Brock; Editing by James Jukwey)

    Wed Jul 1 15:11:02 2009

20. NEW YORK (Dow Jones)–U.S. crude-oil inventories decreased for the fourth week
    in a row, while petroleum product stockpiles posted a larger-than-expected
    increase, according to U.S. Department of Energy data released Wednesday.
    Crude stockpiles fell by 3.7 million barrels to 350.2 million barrels, the
    department’s Energy Information Administration said in its weekly report. This
    compares with a 2.1-million-barrel decline forecast in a Dow Jones Newswires
    survey of analysts.
    Distillate stockpiles, which include heating oil and diesel fuel, increased by
    a greater-than-expected 2.9 million barrel to 155 million barrels. Analysts had
    expected a 1.6-million-barrel increase.
    Like distillates, gasoline stockpiles rose for the third week in a row by 2.3
    million barrels to 211.2 million barrels, compared with an average survey
    estimate of a 1.9-million-barrel gain.
    The percentage of operable capacity refineries utilized in the period
    decreased by 0.1 percentage point to 87.0%. A 0.2-percentage-point gain was
    seen.

    U.S. Oil Inventories:
    For week ended June 26:
    Crude Distillates Gasoline Refinery Use
    EIA data: -3.7 +2.9 +2.3 -0.1
    Forecast: -2.1 +1.6 +1.9 +0.2

    Figures in millions of barrels, except for refining use, which is reported in
    percentage points. Forecasts are the average of expectations in a Dow Jones
    Newswires survey of analysts earlier in the week.

    -By Madalina Iacob, Dow Jones Newswires
    (END) Dow Jones Newswires
    07-01-09 1100ET

21. By Gregory Meyer
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–Crude oil surrendered some gains Wednesday after the
    U.S. government reported growing domestic stores of key refined products
    gasoline and distillates.
    Light, sweet crude for August delivery was recently up 48 cents, or 0.7%, at
    $70.37 a barrel on the New York Mercantile Exchange. Brent crude on the ICE
    Futures exchange was 56 cents higher at $69.86 a barrel.
    The crude market was close to $72 a barrel before the U.S. Energy Information
    Administration issued its weekly update on U.S. petroleum inventories. The
    agency said commercial crude stockpiles declined by 3.7 million barrels to
    350.2 million barrels in the week ended June 26, the fourth straight weekly
    drawdown. Analysts polled earlier by Dow Jones Newswires had expected a 2.1
    million-barrel decline.
    At the same time, gasoline stockpiles grew by 2.3 million barrels and
    distillates, which include diesel and heating oil, rose by 2.9 million barrels,
    each increasing more than expected.
    The market had rallied overnight on separate data from the American Petroleum
    Institute, which had reported a much larger 6.8 million-barrel decline in crude
    stocks.
    “The stats are slightly bearish overall,” with the sum of crude and refined
    products inventories increasing, said Morgan Downey, a commodities trader at
    Standard Chartered in New York. “The EIA data is also more bearish than last
    night’s weekly API statistics,” he said.
    Swelling gasoline and distillate stocks hit gasoline and heating oil futures.
    Front-month August reformulated gasoline blendstock, or RBOB, fell 4 points to
    $1.9016 a gallon. August heating oil fell 61 points, or 0.3%, to $1.7816 a
    gallon.
    Crude posted an eight-month high above $73 a barrel earlier this week as
    militant attacks on Nigerian oil facilities cut the country’s supply. Royal
    Dutch Shell PLC (RDSA) said Wednesday that production at its Nigerian onshore
    unit has fallen to 140,000 barrels a day following a string of recent attacks.
    In 2008, production from Shell-run operations in Nigeria – the majority based
    onshore – averaged over 850,000 barrels of oil equivalent a day.

    -By Gregory Meyer, Dow Jones Newswires
    (Benoit Faucon in London contributed to this report)

    Dow Jones Newswires
    07-01-09 1108ET

22. Choices – Thanks for posting 18. Guys like “mike” give me the willies. No specifics, lots of expletives. Give’s bloggers a bad name. By the way, this isn’t a blog, its an online, interactive journal, lol.

23. Wiki page on GECF

    http://en.wikipedia.org/wiki/Gas_Exporting_Countries_Forum

24. Morning all. I didn’t trust the sell off yesterday and if 933 SPX gets taken out then this could get nasty for the bears and we could see 956 again very quickly.

    $ breaking down, metals looking strong for now. Oil? mmmmh not sure but think it still looks bullish and if the indices rock nd $ sells off then oil should run too.

25. Thanks Choices, he is one of the reasons I can no longer watch that channel with sound.

26. Or do I have this all wrong and oil is going to drag the broader market down.

27. Cubic borrowing base goes from $20MM to $7.5 MM. Wells Fargo having bad day

28. 16 came true faster than I thought. Nicky – just nothing bullish in today’s report and we happened to be at the top of the recent trading range when the report came out. Would not be surprised to see $65 to $68 in the next week if we don’t get further unrest in Nigeria and a higher broad market. I don’t think it goes much lower than that though. The stocks are reddening up but dramatically so. Don’t think there is much a trade to the downside here as the stocks are well off recent highs already. If it goes to $65 I’d expect SU steps back 10% or so.

    Cubic – would be a good buy for GMXR but they are strapped. Maybe CRK takes them.

29. RBC bumped up their XCO target to $22 on yesterday’s deal.

30. on the one hand ….
    on the other hand ….

    LOL. Nicky, does all this artificial market stimulation degrade the normal TA patterns in your view ?

    Big yawn today on phony BS pump.

    Took oppty to trade around HK position; sell calls on EOG and PXD (covered); and dump SD.

    I’ll take it.

31. Pack – No kidding big yawn. Historically speaking we should see more news flow next week, Tuesday following the holiday seems to be popular.

32. If the market holds up, there is still a shot that the evil oil speculators will rally crude into the close, closing above $70.

33. just picked up some KOG at 1.05; filled too easily.

34. Going to lunch, back in an hour.

35. DOW JONES NEWSWIRES

    China has requested that proposals for a new global reserve currency to
    replace the U.S. dollar be debated at Group of Eight meetings next week,
    Reuters reported Wednesday, citing G8 sources. Representatives from G8 nations
    – plus Brazil, China, India, Mexico, South Africa and Egypt – meet July 9 in
    Italy. China made its request during discussions about a joint statement that
    will be issued on the second day of the meetings, a source told Reuters.
    Another source acknowledged that China brought up the possible debate. In
    March, the governor of China’s central bank suggested that the world should
    consider using the IMF’s Special Drawing Rights as the reserve currency.

    Dow Jones Newswires
    07-01-09 1302ET

36. Thanks for the story Sam, explains the dollar today. China seems to be gaming it lower here.

    Stocks pretty much frozen with oil down $1.10. Volumes very holidayesque.

37. Emailed from Nicky ~

    My computer is messing me about so I am having trouble posting. But this oil weakness surprises me and I don’t believe will last with the Chinese whispers about the $. The move down off this mornings highs looks corrective. When they bounce it I think it could be big.

38. Choices,

    Meant to post this earlier re 18

    http://market-ticker.denninger.net/archives/1175-To-Dennis-Kneale-Youre-An-Idiot.html

39. By David Bird
    Of DOW JONES NEWSWIRES

    NEW YORK (Dow Jones)–U.S. national average retail gasoline prices may have
    hit their peak for the summer at $2.69 a gallon, and refineries and imports can
    cover any possible rise in demand in driving season, the Energy Information
    Administration said Wednesday.
    Ahead of the 4th of July holiday, the EIA said the near 60-cents-a-gallon rise
    since the beginning of May appears to have run its course.
    EIA reported Monday that the national average retail price of regular gasoline
    fell 4.9 cents a gallon to $2.642 a gallon in the week ended June 29. Pump
    prices on Monday were 35.5%, or $1.453 a gallon, below a year ago.
    The drop was the first since April 27 and the largest since Feb. 23. Prices on
    June 22 hit their highest level since Oct. 20. With the 1.8% drop in the latest
    week, prices are at the lowest level since June 8 and are 35.8%, or $1.472 a
    gallon, below the record high of $4.114 a gallon hit July 7, 2008.
    In the driving season of April through September, the EIA said June 9 it sees
    retail gasoline selling for $2.47 a gallon on average, down 35% from last
    summer.
    In its This Week In Petroleum report on Wednesday, the EIA noted that higher
    imports and refinery output have lifted gasoline stockpiles from their early
    June low.
    EIA data released Wednesday showed gasoline stocks rose 2.3 million barrels to
    211.2 million barrels in the week ended June 26 and are at the highest level
    since May 1.
    Stocks are sufficient to cover 23.3 days of demand at the latest weekly level
    of 9.053 million barrels a day, one day above the five-year average level.
    The EIA noted that imported costs of crude oil, after rising for eight
    consecutive weeks, dropped in the most recent week to $65.92 a barrel. Crude
    oil makes up 56% of the cost of gasoline.
    “As the summer progresses, expected increases in demand due to vacation travel
    can likely be met by higher refinery production or imports, since these supply
    sources have met significantly higher demand levels in recent years,” the EIA
    said.
    “With diesel fuel demand more negatively impacted by economic weakness, and
    U.S. distillate stocks at very high levels, suppliers could devote more
    resources to gasoline, if needed,” the EIA said. “Barring an unexpected supply
    interruption or international price shock, the June 22 price of $2.69/gallon
    may be the highest weekly regular gasoline price for the summer of 2009.”

    -By David Bird, Dow Jones Newswires
    Dow Jones Newswires
    07-01-09 1401ET

40. By Allen Sykora
    Of DOW JONES NEWSWIRES

    Private-sector employment data and a report saying China wants debate on a
    reserve currency amounted to a one-two knockout blow to the U.S. dollar
    Wednesday, which in turn enabled gold and other precious metals to finish
    higher.
    August gold rose $13.90 to $941.30 an ounce on the Comex division of the New
    York Mercantile Exchange. September silver rose 16 cents to $13.76.
    Gold came into the session with a slightly stronger session, with the dollar
    down only slightly.
    Then “the market got a shot in the arm after the dollar lost sizeable ground
    on the heels of this morning’s ADP report,” said Jon Nadler, an analyst with
    Kitco Bullion Dealers.
    Payroll giant Automatic Data Processing and consultancy Macroeconomic Advisors
    reported that private-sector jobs fell 473,000 in the U.S. during June,
    exceeding the consensus forecast. The data came a day before the government
    will issue a pair of employment reports – weekly initial jobless claims and
    June non-farm payrolls.
    A little more than an hour after the ADP report, the euro rose as high as
    $1.4173, compared with $1.4033 late Tuesday. Around the same time, August gold
    got up to $943.
    The metal later got an additional boost after a Reuters report saying China
    has asked to discuss the issue of a new global currency at next week’s Group of
    Eight summit in Italy.
    “The Chinese news has had a big impact,” said Jim Steel, metals analyst with
    HSBC. “Gold was beginning to cut its gains when that came out. It has changed
    the complexion of the market.”
    The euro subsequently moved as high as $1.4201, and August gold hit a peak of
    $947.
    Steel pointed out that gold maintained its strength even though crude oil
    turned from higher to lower over the course of the day. He described
    “all-around buying” in gold, including some shorts who were covering positions
    after a recent price pullback.
    Large speculators were among the buyers, said Larry Young, senior trader with
    Infinity Futures.
    “On the first day of the quarter, we’re seeing money being put to work by
    funds,” he said. “So that is helping push us higher.”
    The rise came a day after traders had cited end-of-second-quarter liquidation
    as a factor that pressured gold.
    But while the weak dollar has pushed gold higher, some participants
    nevertheless appear to be hesitant to go long in the metal at the moment on
    concerns gold hasn’t risen even more and on ideas that there may not be
    inflation in the near future, said Michael Gross, broker and futures analyst
    with OptionSellers.com.
    Gross put support for August gold at the June 23 low of $913.20 an ounce and
    resistance at the June 26 high of $949.
    For September silver, he pegged support at Tuesday’s low of $13.455 and
    resistance at the June 26 high of $14.335.
    Meanwhile, October platinum rose $19.80 to $1,205.10 an ounce, while September
    palladium gained $3.90 to $254.85.
    Steel linked these metals’ gains mainly to the softer dollar. Also, a trader
    commented that platinum appears to be deriving some support from Chinese
    jewelry demand.

    Settlements (includes open-outcry and electronic trading):
    London PM Gold Fix: $938.25 versus $934.50 on Tuesday
    Spot gold at 1:29 p.m. ET: $941.10, up $14.10 from previous day; Range:
    $925.15-$946.90
    August gold: $941.30, up $13.90; Range $926.10-$947
    September silver: $13.76, up 16 cents; Range $13.59-$13.87
    October platinum: $1,205.10, up $19.80; Range $1,176-$1,208.80
    September palladium: $254.85, up $3.90; Range $248.90-$255.80

    -By Allen Sykora, Dow Jones Newswires
    Dow Jones Newswires
    07-01-09 1409ET

41. Thanks, Wyoming-Denninger nails it which is why CNBC does not want him on to ruin the happy talk.

42. Market seriously asleep. Here’s to increased news flow beginning next week. I’ll be taking a half day off tomorrow after the gas number.

43. Another for a slow day-do not know much about the author but have seen a number of his articles.

    http://seekingalpha.com/article/145527-don-t-give-up-on-oil-stocks-as-markets-rebound?source=article_lb_author

44. Stocks kind of fell off into the close but not a bad close on crude or products. Boredthirty

45. Another perspective on fundamental oil prices :

    http://www.scribd.com/doc/16763183

46. Pingback: voyance en ligne

This site uses Akismet to reduce spam. Learn how your comment data is processed.