Thursday, September 9, 2010

Black Gold

But eventually it's a question of access: Getting access to fields is on top of the oil companies' agenda. We see a substantial build-up of supply occurring over the coming years.

-Daniel Yergin

WTI Crude Oil traded higher up to $75.95/barrel during the morning session. However the commodity pulled back when the EIA data was released. The October contract currently trades at $74.10 Below, I compiled some of the key EIA data for your own synthesis & analysis.

Price Pressure
Why has CL1 traded in a range for the past month? There is a large contagion gap between the near month October Futures contracts and the November Contracts of 2.04%. As settlement date approaches, November prices will fall. In addition, supply levels in Kuching Oklahoma remain above historical levels for this time of year.

Macro View
Growth numbers out of China have been less than stellar. China PMI data was up only .5% from July to 51.7%, HSBC numbers were below 50. Also, the 'Deflation Story' in the U.S. and Japan will not help the perception of commodities. As money continues to flow into the bond market inflationary investments become less attractive. Lastly, there has been less conflict in the Middle East than normal. Thus, OPEC sour-crude supply is not in danger of shortages in the near-term.

Highlights from EIA Report

-U.S. crude oil imports averaged 8.9 million barrels per day last week, down by 794 thousand barrels per day from the previous week.
-Over the last four weeks, crude oil imports have averaged 9.5 million barrels per day, 500 thousand barrels per day above the same four-week period last year.
-U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 1.9 million barrels from the previous week.
-At 359.9 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year
-Distillate fuel inventories decreased by 0.4 million barrels, and are above the upper boundary of the average range for this time of year.
-Total products supplied over the last four-week period has averaged 19.6 million barrels per day, up by 0.7 percent compared to the similar period last year
-Jet fuel demand is 0.8 percent lower over the last four weeks compared to the same four- week period last year.
-During June and July of 2010, the Gulf oil producing region was impacted by two storms: Alex and Bonnie shut in a cumulative total of about 1.6 million barrels of crude oil production.

Patrick M. Ambrus
Twitter: AnalyzeCapital

Empirical data is courtesy of

No comments:

Post a Comment

This Blog has been developed by Analyze Capital LLC, and as an independent organization we provide “AS IS” information without warranty. The ideas and opinions expressed by the contributers of this blog are personal and do not represent the actions or policies of Analyze Capital LLC. The contents of this blog do not intend to assert recommendations or to offer advice of any kind. We are not responsible the consequences, be they gains or losses, that may result from using any of the information from this blog.