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23MAY13
EIA data – Driving season nearly here
This week’s EIA data saw implied gasoline demand jump over 0.4mmb/d (+5.4% WoW) from last week’s lowly 8.4mmb/d to the highest YTD, in also the largest WoW movement YTD, and back within the seasonal range. The rise in demand comes a week ahead of the start of the US driving season on 27 May (Memorial Day) but also amid particularly subdued YoY demand in recent weeks. In fact, on a 52-week average basis, gasoline demand has stagnated around the -1.5% YoY level in the past ten weeks. Gasoline imports...
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16MAY13
EIA data – Weak demand
Yesterday’s EIA Weekly Petroleum Status Report had implied all-product demand down 0.6mmb/d (-3.1%) WoW, dropping from last week’s YTD high to 18.5mmb/d and back below the seasonal average. Weakness in implied demand for the ‘other oil products’ category was mainly responsible for that, with demand down 0.7mmb/d (-17.7%) WoW to 3.4mmb/d and within the more accustomed 3.0-3.5mmb/d range after last week’s spike in demand. Implied demand for gasoline eased 0.1mmb/d (-1.2%) WoW to 8.3mmb/d, one of the...
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18APR13
EIA data – Market unmoved by unexpected crude inventory draw
In yesterday’s EIA Weekly Petroleum Status Report, US crude inventory was down 1.2mmbbl (-0.3%) WoW. That was only the third crude inventory draw YTD and came unexpectedly as market participants were instead looking for a 1.2mmbl build. Even so, the market appeared to pay little heed to that. Brent continued to trend lower, back into the sub-USD 100/bbl territory as at the time of writing. As observed in recent weeks, the movement in crude inventory was curiously lower than the numbers suggest....
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21MAR13
EIA data – Unexpected, counter-seasonal crude inventory draw
According to yesterday’s Weekly Petroleum Status Report for the week ended 15 March, there was an unexpected and counter-seasonal drop in US crude inventory, down 1.3mmbbl (-0.3%) WoW to 382.7mmbbl. Markets had expected a 2mmbbl build in crude inventory. The inventory draw was also the first in 9 weeks for crude and there were also inventory draws for gasoline and distillate. The two main contributing factors to the crude inventory draw were a 0.2mmb/d WoW drop in crude imports and, more importantly...
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14MAR13
EIA data – Sharp rise in US production
This week’s EIA data had US crude oil production up 66kb/d WoW (+0.9%) at 7,159kb/d, having previously broken through the 7.1mmb/d level three weeks ago but subsequently languished below that point. The growth rate since the beginning of the year implies full year average crude production of 7.5mmb/d, or YoY growth of 1.0mmb/d (+15.3%). That is higher than the 0.84mmb/d YoY growth in US liquids supply that the IEA and EIA currently forecast. Crude imports rose 0.2mmb/d (3.1%) WoW to 7.5mmb/d. There...
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22FEB13
EIA data – Crude oil inventory reaches seven-month high
This week’s EIA data, released a day later than usual due to the Presidents Day holiday, had a 4.1mmbbl crude oil inventory build WoW, double market expectations. At 376.4mmbbl, crude inventory levels are at their highest since July 2012 and comfortably above the top of the seasonal range. A 0.2mmb/d (+2.3%) WoW increase in crude imports contributed to the inventory gain, as did a 0.1mmb/d (-0.9%) WoW fall in refinery throughput. Refinery utilisation fell more than expected, down 0.9% WoW, to 82...
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14FEB13
EIA data – Demand increase and inventory draw
This week’s EIA data saw a sharp increase in implied all product demand, up 1.0mmb/d (+5.5%) WoW to 19.0mmb/d, closing in on the seasonal average. Demand was stronger than year-ago levels (+2.1%), while its a 52-week YoY average continued to improve and is now -0.9%, from -1.1% last week. It was the ‘other oil products’ category that saw the greatest WoW increase in implied demand, up 0.6mmb/d (+22.8%). Implied demand for distillates also strengthened, up 0.3mmb/d (+8.8%) WoW to 3.9mmb/d. However...
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8FEB13
LNG spot prices continue to increase
North East Asian spot LNG cargo prices for delivery four-eight weeks ahead continue to increase, adding another USc 40/mmbtu to hit USD 19.40/mmbtu (USD 685/mcm), easily the highest in the last two years. NE Asian spot LNG prices are now around USD 4/mmbtu (USD 141/mcm) above the price of contracted LNG volumes, we estimate. That is a testimony to the tightness of the market which has been driven both by the colder than normal winter in NE Asia and, we believe, strong competition for cargoes from...
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30JAN13
Iran potential to drive oil price up weakening
In our view, Iran was a key driver behind the strength of oil prices during 2012. We expect that the Iran factor will probably have less potency in terms of its impact on oil prices this year because Iranian production has slumped, but now appears to be stabilising, global oil inventories have rebuilt significantly and global spare capacity appears likely to increase. According to the IEA, by the end of 2012, Iranian crude production had fallen from 3.45mmb/d in December 2011 to 2.70mmb/d by December...
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17JAN13
EIA data – Crude inventory draw hardly makes a dent
This week’s US EIA data surprised the market with a 1.0mmbbl draw on crude inventory; the market was expecting a 2.2mmbbl inventory build. However, that hardly made a dent on crude inventory (-0.3% WoW) and, moreover, there were inventory builds for both gasoline and distillate. Crude inventory remains above the top of the seasonal range, as does gasoline inventory, while distillate inventory levels continue to build. Implied all product demand improved from the week before, but only marginally...
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14JAN13
Back to April highs
Global markets have made a firm positive move since the start of the year on the back of the deal on the US fiscal cliff (although temporary), coupled with eased tensions in the Eurozone and improved macro data flow out of China (its FY12 GDP growth is due to be released this Friday). Across the globe, equity indices have advanced 3% YTD, with the MSCI DM trading around a multi-month high, just a hair below the last peak at end-April 2011 (after which the market retreated 23% in two months). However...
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10JAN13
EIA data – US crude oil production exceeds 7mmb/d
Yesterday’s EIA petroleum status report, the first of the weekly series for the new year, had US crude oil production surpassing the 7mmb/d mark as production rose to the highest levels since 1993. There was a small but counter-seasonal crude inventory build of 1.3mmbbl (+0.4%) WoW taking inventory levels significantly above the top of the seasonal range. Furthermore, there were strong builds in product inventory with gasoline up 7.4mmbbl (+3.3%) and distillate up 6.8mmbbl (+5.5%) WoW. That resulted...
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11DEC12
Preliminary data has Chinese oil demand at an all-time high
China’s refinery throughput reportedly reached a record 41.61mmt, or 10.1mmb/d, in November according to sources citing China’s National Bureau of Statistics. Under the refinery side methodology (refinery throughput plus net product imports), that would imply demand of 10.4mmb/d which would mark an all-time high. Also, according to preliminary customs data published yesterday, crude oil imports for November reached 5.6mmb/d (+0.1mmb/d, +2% MoM), the highest in six months. Assuming flat MoM domestic...
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4DEC12
Net speculative positions rise
Net speculative positions were up on both sides of the Atlantic. The CFTC had reported US non-commercial net longs in futures and options (F&O) in WTI sharply up (+62.5%) WoW, but from a very low base, to close at 8,955 positions in the week to 30 November. While for the week to 27 November, non-commercial net longs in F&O on the ICE in Brent were up 2,455 positions (+2.5%) to 101,022 positions. Both Brent and WTI were flat WoW to the respective reporting dates, Brent at USD 109.87/bbl and WTI at...
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29NOV12
EIA data – Crude inventory remains at elevated levels
This week’s EIA data had crude inventory down a fraction (-0.3mmbbl; -0.1%) WoW but at 374.1mmbbl it remains at high levels and above the top of the seasonal range. In terms of Days Forward Cover (DFC), crude inventory appears comfortable at 25.2 days, over 2 days above the seasonal average. Meanwhile, there was a relatively sizeable 3.9mmbbl WoW build in gasoline inventory, which continues to look comfortable, especially in terms of DFC, but a 0.8mmbbl WoW draw in distillate inventory, which appears...
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16NOV12
Sandy effect passes over
This week’s EIA data, released a day later than usual due to the Veterans Day public holiday, bore signs of a recovery from the effects of Hurricane Sandy which struck the US Northeast at the beginning of the month. Implied all product demand recovered sharply, up 1.0mmb/d (+5.3%) WoW to 19.3mmb/d — one of the highest recorded figures YTD. That was on the back of strong WoW gains in Implied demand for gasoline and distillate, which were up 0.6mmb/d (+7.2%) and 0.5mmb/d (+14.4%) WoW, respectively...
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8NOV12
EIA data – Sandy saps gasoline demand
This week’s EIA bore the effects of Hurricane Sandy. The US Northeast, through which Sandy blasted, is a significant importer and consumer of petroleum products and the shut down in preparation for the hurricane and from the resulting flooding and power cuts, was reflected in the numbers. Implied total US demand for gasoline dropped 0.5mmb/d (-6.1%) WoW to 8.3mmb/d, whilst gasoline imports plummeted 56.2% WoW to 0.3mmb/d. Refiners were also hard hit, with utilisation in US PADD 1 down to 58.5% from...
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6NOV12
Oil price correction might be underway
The Brent price has dropped USD 10/bbl over the last three weeks to levels last seen at the start of August, when the oil price was recovering sharply from its 2Q12 sell-off, boosted by Israeli Prime Minister Netanyahu’s belligerent comments over Iran, in our view. Given the volatility in the oil price over the last year, it is probably too early to state definitively that the oil price is correcting downwards since it has yet to breach even one standard deviation from the mean. However, it remains...
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2NOV12
EIA data – Demand plunges WoW
The EIA’s data for the week to 26 October was released yesterday, a day later than usual as a result of the disruption caused by Hurricane Sandy. It is unclear to what extent, if any, the completeness of data reporting to the EIA might have been affected, but the hurricane’s actual impact on the numbers is likely to feature in the following week’s data. In that respect, the 0.8mmb/d (-4.2%) plunge in implied all product demand was probably not due to the hurricane. All product demand fell to 18.3mmb/d...
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25OCT12
EIA data – Bearish numbers
This week’s EIA data was a rather bearish set of data for oil prices, in our view. There was a greater than expected build in both US crude inventory and gasoline inventory, while the draw in distillate inventory was less than forecasted. What’s more, implied all product demand worsened WoW, predominantly due to a fall in implied gasoline and distillate demand. Crude imports rose 0.5mmb/d (+5.7%) WoW and that largely accounted for the WoW increase in crude inventory, with refinery throughput largely...
