The latest working storage build was about in line with consensus expectations, and as we issue our report the NYMEX is relieved and attempting to recover further.  On the demand side weather contributed once again though to a lesser degree, with last week slightly warmer than both last year and normal.  The year-over-year storage deficit continued to widen, with supplies now 132 bcf below the comparable point in 2009, expanding by 38 bcf from the previous week.  We have been targeting a year-over-year storage deficit at the end of September of 135 bcf and, thanks in large part to warmer than normal weather, it would appear our target deficit will be realized sooner than expected even without any production impact from any upcoming hurricane activity. 

With regard to price, we are still retaining our September (basis October NYMEX) target of $5.85 per mmBtu, which remains about $1.15 per mmBtu above the current market.  However, if crude oil can begin to build on its recent gains and the year-over-year storage deficit continues to widen, our outlook has a reasonable chance of achievement, particularly when viewed in the context of our seasonal price analysis as presented and updated in our morning notes.  For 2010 as a whole, we also retain our forecast prompt NYMEX/Henry Hub average of $5.05 per mmBtu.

Continue Reading

dailyenergy

Click on “dailyenergy” link abofe to access report.

Continue Reading

Crude Oil – Down 2.784 MB

Gasoline – Up 0.729 MB

Distillate – Up 2.173 MB

Continue Reading

dailyenergy

Click on “dailyenergy” link above to access report.

Continue Reading

STOCKS LISTED IN THOUSANDS OF BBL)

                                   CURRENT WEEK       YEAR AGO        PREV WK

                         CHANGES     07/30/10         07/31/09       07/23/10

 Ref % Operated            – -         86.7             82.6           87.4

 Ttl Mogas Stocks          2,305      225,047          215,671       222,742*

 Distillate Stocks         1,109      163,375          157,903        162,266

 Resid Fuel Stocks           576       41,556           35,311         40,980

 ** Crude Imports         -1,358        9,361            8,699         10,719

 Crude Oil Stocks           -776      354,926         349,932*       355,702*

STOCKS LISTED IN THOUSANDS OF BBL)

                                   CURRENT WEEK       YEAR AGO        PREV WK

                         CHANGES     07/30/10         07/31/09       07/23/10

 Ref % Operated            – -         86.7             82.6           87.4

 Ttl Mogas Stocks          2,305      225,047          215,671       222,742*

 Distillate Stocks         1,109      163,375          157,903        162,266

 Resid Fuel Stocks           576       41,556           35,311         40,980

 ** Crude Imports         -1,358        9,361            8,699         10,719

 Crude Oil Stocks           -776      354,926         349,932*       355,702*

Continue Reading

Platts survey is looking for a 1.2 million barrel draw in crude oil stocks, an 870,000 barrel decline in gasoline supplies, and a 1.16 million barrel increase in distillate inventories.  Looking first at crude oil, everyone is expecting a large falloff in gross imports from the inordinately large average of almost 11.2 MMB/D for the week ending July 23.  Such universal expectations always bother us, but we would have to concur that much of the increase was due to the timing around Bonnie and not due as much to the landing of previously held supplies in offshore floating storage given the modest shift in the term structure.  Having said this, we would still look for imports to average almost 9.6 MMB/D.  With runs assumed to have held about steady and domestic production averaging close to 5.5 MMB/D, our arithmetic would suggest a crude oil stock decline somewhat in excess of consensus expectations.               

With regard to refined products, we would expect implied gasoline demand to have eased from the previous week’s average to less than 9.6 MMB/D.  Gross imports should also have fallen off somewhat, however, consistent with anecdotal arbitrage evidence in the physical market.  With refinery production easing a bit from the previous week’s surge, it would all imply a modest build in gasoline stocks.  For distillate, under our economic thesis we would be looking for a further modest recovery in implied demand to revert to our estimated “deceleration mean”, perhaps to an average of around 3.7 MMB/D.  We would also be looking for supply to have been about steady accompanied by relatively robust exports.  Adding up all components suggests a distillate stock build somewhat shy of what the market is looking for.  If crude oil stocks did in fact decline more than consensus expectations last week and implied refined product demand was at least steady, if not firmer, it should be sufficient for funds to further increase net length.  Any such response would obviously be compounded if the equity market can build on yesterday’s gains and the dollar weakens further.  As we have previously discussed, we do not believe funds will be willing to build on net length based solely on a weaker dollar in the current environment.  It will be used as one more excuse to buy along with other variables.  For argument’s sake, however, as we mentioned last week, a dollar/euro rate of $1.3500 would imply in isolation a value for prompt NYMEX crude oil of around $84.00 per barrel.

Continue Reading

MIAMI (AFP)–A tropical storm formed in the Atlantic Ocean Tuesday, moving north-northwest in the direction of the eastern seaboard of the United States, U.S. weather authorities said.

Continue Reading

dailyenergy

Click on “daily energy” link above to access report.

Continue Reading