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EIA Oil Inventory Preview
The EIA will report oil inventories one day late and at 11:00am EST this week because of Monday’s President’s Day
holiday. We expect a reading of +1.0 MB in this week’s figures, with inventories likely to be pressured by reduced
levels of imports. The wide Brent-WTI spreads of the last few weeks has created a reduction in imports to PADD 3 in
the last three weeks, and could be maintained again this week. Product inventories are expected to fall as well, with
pressure coming from improvements in demand and from the production switch to summer blends by refineries.
Natural gas inventories are expected to fall 76 bcf this week compared to a five-year average decline of 158 bcf. The
market faced much warmer-than-normal temps during the survey week, with the HDD population-weighted forecast
at 164.0 compared to the 10-year norm of 203.2. Next week’s temperatures are expected to see the warm temps in
the central U.S. migrate south and east, resulting in a HDD forecast of 178.0. That compares to a 10-year norm of
192.5 and could result in a draw of 55 bcf. That would compare to the five-year average of -134 bcf.

Daily Energy Report From MF Global – February 23rd.

Published on 22 February 2011 by cwhornsby in Hornsby Energy Trading

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dailyenergy

Click on “dailyenergy” link above to access report.

Crude Jumps on Worseining Libya Unrest – WSJ 02-21-11

Published on 21 February 2011 by cwhornsby in Hornsby Energy Trading

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By Brian Baskin

Of DOW JONES NEWSWIRES

LONDON (Dow Jones)–Crude futures soared Monday, as violent clashes between protesters and government forces in Libya revived fears that escalating demonstrations would disrupt the region’s oil exports.

LONDON (Dow Jones)–Crude futures soared Monday, as violent clashes between protesters and government forces in Libya revived fears that escalating demonstrations would disrupt the region’s oil exports.

At 1100 GMT, the front-month April Brent contract on London’s ICE futures exchange was up $1.95, or 1.9%, at $104.47 a barrel, having hit a two-year high of $105.08 earlier. The front-month March contract on the New York Mercantile Exchange was up $3.33, or 3.9%, at $89.53 a barrel, its highest since Feb. 4.

At 1100 GMT, the front-month April Brent contract on London’s ICE futures exchange was up $1.95, or 1.9%, at $104.47 a barrel, having hit a two-year high of $105.08 earlier. The front-month March contract on the New York Mercantile Exchange was up $3.33, or 3.9%, at $89.53 a barrel, its highest since Feb. 4.

Anti-government protests have spread throughout Libya’s major cities, including the capital Tripoli. With violence worsening, several oil companies, including BP PLC (BP), are pulling personnel from the country. Around 50,000 barrels a day of production has been shut down, according to the International Energy Agency.

Anti-government protests have spread throughout Libya’s major cities, including the capital Tripoli. With violence worsening, several oil companies, including BP PLC (BP), are pulling personnel from the country. Around 50,000 barrels a day of production has been shut down, according to the International Energy Agency.

The IEA is on “high alert” for potential supply disruptions, David Fyfe, head of the IEA’s Oil Industry and Markets Division, said at a conference in London.

The IEA is on “high alert” for potential supply disruptions, David Fyfe, head of the IEA’s Oil Industry and Markets Division, said at a conference in London.

Libya exports nearly 1.4 million barrels a day, making it the biggest producer to experience serious unrest since demonstrations began in Tunisia and Egypt in January. Leaders of both those countries have since been ousted, though the protests had little impact on volumes of oil moving through Egypt along the Suez Canal and Sumed pipeline.

Libya exports nearly 1.4 million barrels a day, making it the biggest producer to experience serious unrest since demonstrations began in Tunisia and Egypt in January. Leaders of both those countries have since been ousted, though the protests had little impact on volumes of oil moving through Egypt along the Suez Canal and Sumed pipeline.

Brent futures had settled into a narrow trading range as Egypt began to calm last week, but new uncertainty about Libya is reviving the rally.

Brent futures had settled into a narrow trading range as Egypt began to calm last week, but new uncertainty about Libya is reviving the rally.

”Unless we see a swift resolution, [the protests] will keep prices well supported, and you could have spikes,” said Amrita Sen, an analyst with Barclays Capital.

”Unless we see a swift resolution, [the protests] will keep prices well supported, and you could have spikes,” said Amrita Sen, an analyst with Barclays Capital.

In a reversal from recent trading sessions, Nymex futures saw the biggest gains. The threat to Libya’s supplies appeared serious enough to overshadow the growing glut of oil in Cushing, Okla., the contract’s delivery point, which had kept Nymex prices from following Brent higher.

In a reversal from recent trading sessions, Nymex futures saw the biggest gains. The threat to Libya’s supplies appeared serious enough to overshadow the growing glut of oil in Cushing, Okla., the contract’s delivery point, which had kept Nymex prices from following Brent higher.

Nymex’s discount to Brent narrowed to under $15 a barrel, nearly a two-week low, after reaching nearly $20 last week. However, the two contracts have historically traded within $2 of one another.

Nymex’s discount to Brent narrowed to under $15 a barrel, nearly a two-week low, after reaching nearly $20 last week. However, the two contracts have historically traded within $2 of one another.

Trading was expected to be light on Monday, as floor trading on the New York Mercantile Exchange is closed for the U.S. Presidents Day holiday. Electronic trading halts early as well.

Trading was expected to be light on Monday, as floor trading on the New York Mercantile Exchange is closed for the U.S. Presidents Day holiday. Electronic trading halts early as well.

The ICE’s gasoil contract for March delivery was up $12.75, or 1.5%, at $873.50 a metric ton, while Nymex gasoline for March delivery was up 4.48 cents, or 1.8%, at $2.5961 a gallon.

The ICE’s gasoil contract for March delivery was up $12.75, or 1.5%, at $873.50 a metric ton, while Nymex gasoline for March delivery was up 4.48 cents, or 1.8%, at $2.5961 a gallon.