Thursday, August 31, 2023

Kemp: "Depleting US crude inventories lift oil prices"

John Kemp at Reuters, August 31:

U.S. commercial crude oil inventories have depleted by 34 million barrels since the middle of July, contributing to a sense the market is tightening and driving a recovery in spot prices and calendar spreads.

Commercial crude inventories have declined in five of the most recent six weeks, according to surveys conducted by the U.S. Energy Information Administration (“Weekly petroleum status report”, EIA, Aug. 30).

Commercial crude has accounted for all the drawdown in total inventories over the same period, which have fallen by just 19 million barrels since July 14, with products up by 12 million and strategic stocks up by 3 million.

As a result, commercial crude stocks were just +1 million barrels (+0.3% or +0.02 standard deviations) above the prior ten-year seasonal average on Aug. 25.
The surplus had narrowed from a recent high of +22 million barrels (+5% or +0.37 standard deviations) on July 14.

The recent drawdown has reversed a previous accumulation that had seen the surplus swelling since the end of April.

In consequence, front-month U.S. crude futures prices have risen by almost $7 per barrel (9%) since July 14 and almost $15 (22%) from the recent low on June 27.
Anticipating, accelerating and amplifying the decline in stocks and rise in prices, hedge funds increased their position in U.S. crude futures and options to 134 million barrels on Aug. 22, up from just 46 million on June 27.

The drawdown in inventories has especially drained stocks from tank farms clustered around Cushing in Oklahoma, the delivery point for the NYMEX U.S. crude futures contract.
Cushing crude inventories have declined in five of the most recent six weeks by a total of 9 million barrels (-24%) since July 14.....


Most active futures contract $83.52.

Via FinViz (also on blogroll at right)

Crude Oil Chart Daily


That's the last month or so, there are dozens more. If interested use the 'search blog' box upper left. 

June 4: 

"Oil Surges After Saudis Make Additional 1 Million Bpd Voluntary Production Cut"

President Biden should immediately, right now, today, make some sort of agreement with Saudi Arabia to refill the U.S. Strategic Petroleum Reserve over the next six or eight months, coincidentally an implied rate of around 1mm Bpd .

But he and his handlers probably won't see the opportunity and our Energy Secretary is an energy moron and much like the Transportation Secretary, was promoted far past her/his abilities, so who's left to push for the prize and seize the opportunity?....