US Crude Stocks- Up 9.57 MB —- Cushing Stocks Down 0.292 MB at 29.905 MB
US Gasoline Stocks- Up 1.859 MB
US Distillate Stocks- Up 0.554 MB
- For the week ending December 23, the latest Platts survey is looking for a 2.3 million barrel decline in U.S. crude oil stocks, a 1.2 million barrel fall in distillate supplies, and a 500,000 barrel drop in gasoline inventories. In the context of our discussion yesterday morning, our expected crude oil stock decline would fall close to consensus expectations. Because we expect some retracement in implied distillate demand back toward our underling mean, we would look for a somewhat smaller decline in distillate supplies than the market is expecting. We are also looking for a modest build in gasoline supplies, but if pre-holiday secondary stocking exceeded our estimates primary inventories could have easily fallen in line with consensus expectations. We note the comparable period last year witnessed a healthy gasoline stock draw, but in general history is not perfectly consistent prior to the Christmas holiday. In addition, underlying gasoline consumption is so weak at the present time the arithmetic suggests it could offset any pre-holiday secondary stocking effect.
Our Iraq theme for 2012 has already begun to unfold, with first the moves by Prime Minister al-Maliki to embark on a partial purge of the Sunni component of the government. Yesterday, 16 bombs exploded in Baghdad killing at least 72 people with no one as of yet claiming responsibility. It is reasonable to assume, however, that the violence was a Sunni response to al-Maliki’s actions.
LONDON (Dow Jones)–Crude-oil futures were mixed Friday, trading in a narrow range, but analysts said they may easily swing up or down in the next few sessions in the thin holiday trade.
| “Given low volumes and the potential interest to mark the end-of-the-year price level, it is going to be difficult to interpret the fundamentals according to the flat price movements over the next five trading days,” Olivier Jakob, managing director of Swiss consultancy Petromatrix, said in a note. |
| At 1113 GMT, the front-month February Brent contract on London’s ICE futures exchange was 11 cents, or 0.1%, down at $107.78 a barrel. The front-month February contract on the New York Mercantile Exchange was trading up 27c, or 0.3%, at $99.80 per barrel. |
| Nymex crude continues to outperform Brent following a string of upbeat U.S. macro-economic news this week. |
| “WTI continues to attack the resistance of $100.00 a barrel, even though using the word ‘attack’ might be a bit strong when volume are so low,” Jakob said. |
| But it is surprising that Brent has shown a much more modest growth than Nymex crude, given Thursday’s bombings in Iraq and media reports that Iran plans to launch a 10-day naval drill in the Strait of Hormuz Saturday, said the Schork Report. |
| “Keep in mind that WTI is priced at Cushing, Oklahoma, a landlocked hub very, very far from Iraq–thus the ARA [Europe's key oil] hub should be more sensitive to [Middle East] turmoil, not less,” it added. |
| The Brent/WTI spread has narrowed to below $8 a barrel, and it is unlikely to widen over $10 a barrel into 2012 as the supply side situation is normalizing for Brent with the return of Libyan oil, while the U.S. Midwest oil glut is dissipating, said VTB Capital’s Andrey Kryuchenkov. |
| At 1113 GMT, the ICE’s gasoil contract for January delivery was up 25 cents at $919.75 per metric ton, while Nymex gasoline for January delivery was 13 points lower at $2.6385 per gallon. |
*EIA: US Total Working Gas In Storage -100 Bcf At 3629 Bcf
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The neopress is pointing out that U.S. crude stocks stand at the lowest level since the week ending December 26, 2008. At that time, the prompt NYMEX crude oil contract was trading under $40.00 per barrel reflecting the global financial meltdown and recession, so low stocks were obviously not much of a factor in price determination. In addition, at that time the days supply of crude oil, more relevant than the absolute level, stood at 22.5. Last week’s days supply was 22.2, so not that far from the December 2008 value. Also, if we look at DOE month-end data for the last several years, U.S. crude stocks have been far lower than they were last week. For example, if we look back at this decade, the lowest we see is only 18.1 days at end-August 2003. At that time the prompt NYMEX crude oil contract was trading around $31.00 per barrel. Of course, we can also fast forward to June 2008, when end-June stocks stood at a modestly higher 19.3 days and the prompt NYMEX crude contract was trading at $140.00 per barrel.
The EIA is scheduled to release its storage data Thursday at 10:30 a.m. EST.
| The survey’s median result was 105 billion cubic feet, with a high estimate of a 120-bcf draw and a low of a 98-bcf draw. The storage estimate falls short of last year’s 181-bcf draw in storage for the same week and the 140-bcf five-year average draw for that week. |
| If the storage estimate is correct, inventories as of Dec. 16 will total 3.623 trillion cubic feet, about 11.8% above the five-year average and 6.7% above last year’s level for the same week. |
| Warmer-than-normal temperatures have driven inventory draws to come in below average throughout autumn. That continued last week across the northern tier and eastern seaboard of the country. Those patterns are expected to continue into the new year. |
US Crude Stocks- Down 10.87 MB (Cushing Stocks – Down 0.99 at 30.198 MB)
US Gasoline Stocks- Down 0.421 MB
US Distillate Stocks- Down 2.352 MB
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US Crude Stocks- Down 4.5746MB —- Cushing Stocks Down 1.01 MB at 30.2 MB
US Gasoline Stocks- Down 0.394 MB
US Distillate Stocks- Down 2.779 MB
Hornsby Trading News
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – February 7th.
- US NATURAL GAS INVENTORY SURVEY: Draw Of 126 Bcf Expected – Dow Jones
- Weekly DOE Inventory Report – February 1st.
- API Inventory Report – January 31st.
- Platts Energy Inventory Survey Plus Hornsby & Company Inventory Assessment – January 31st.